Opinion
20-CV-9790 (AT) (BCM)
12-22-2023
GEORGE PASCHALIS MANNOURIS, Plaintiff, v. COMMISSIONER OF SOCIAL SECURITY, Defendant.
REPORT AND RECOMMENDATION TO THE HONORABLE ANALISA TORRES
BARBARA MOSES, United States Magistrate Judge.
By motion dated August 22, 2023 (Dkt. 24), plaintiff George Paschalis Mannouris seeks an order pursuant to § 206(b) of the Social Security Act, 42 U.S.C. § 406(b), approving an award of $14,000 to his attorney, representing approximately 14% of the past due benefits payable to him by the Social Security Administration (SSA) after remand in this action. Under the Retainer Agreement between plaintiff and the Law Office of Charles E. Binder and Harry E. Binder, LLP (B&B), if the court reviewing the Commissioner's decision remanded plaintiff's case (which it did), and if, on remand, plaintiff secured an award of past due benefits (which he has), B&B was entitled to apply for fees under § 406(b) up to 25% of any back due benefits. See Binder Aff. (Dkt. 24-4) Ex. A (Retainer Ag.), ¶ 3. Because plaintiff secured a remand by stipulation, without briefing or arguing the case in this Court, his attorney seeks an award of only approximately 14% of plaintiff's past due benefits, from which B&B will remit to plaintiff the $1,600.99 that the Court previously awarded the firm under the Equal Access to Justice Act (EAJA), 28 U.S.C. § 2412. See Binder Aff. ¶ 12. The Commissioner does not object to plaintiff's motion. (Dkt. 29.)
The District Judge referred the case to me on December 2, 2020, before it was remanded. (Dkt. 6.) Accordingly, the fee motion is before me for report and recommendation. For the reasons set forth below, I respectfully recommend that the motion be GRANTED.
I. BACKGROUND
Plaintiff applied to the SSA for disability benefits on October 31, 2017, but his application was denied. Compl. (Dkt. 1) ¶¶ 6-7. Plaintiff requested a hearing before an administrative law judge (ALJ), but after that hearing the ALJ determined that plaintiff was not entitled to benefits. Id. ¶¶ 8-9. The Appeals Council denied review on September 21, 2020, making the decision of the ALJ final. Id. ¶¶ 10-11.
Plaintiff timely filed this action on November 20, 2020, and on July 14, 2021, the Commissioner filed the 795-page administrative record. (Dkt. 14.) On September 13, 2021, before any motions were filed or any briefs were submitted, the Commissioner advised the Court that the parties were in discussions to "determine if the Commissioner is able to agree to stipulate to remand this action for further administrative proceedings." (Dkt. 16.) Less than two weeks later, the parties did stipulate to remand the action for further administrative proceedings. (Dkt. 18.) On November 9, 2021,the Court so-ordered the parties' stipulation awarding $1,609.96 in fees and reimbursement of the $400 filing fee pursuant to EAJA. (Dkt. 23.)
On remand, after another ALJ hearing, plaintiff was found disabled. Binder Aff. ¶ 5. On August 5, 2023, the SSA notified plaintiff that he was entitled to monthly disability payments "beginning October 2016," including past due benefits in the amount of $99,493. Id. Ex. C. B&B filed the present fee motion on August 24, 2023. (Dkt. 24.) The Commissioner "neither supports nor opposes" plaintiff's motion. (Dkt. 29 at 1.)
The SSA's letter did not state the total amount of the past due benefits, but noted that the agency had "withheld $24,873.25 from your past due benefits in case we need to pay your representative." Binder Aff. Ex. C, at 3. Because it is the agency's practice to withhold 25%, I can extrapolate that plaintiff's past due benefits amounted to $99,493. See Sinkler v. Berryhill, 932 F.3d 83, 86 4 (2d Cir. 2019) ("In practice, the SSA 'withholds a single pool of 25% of past-due benefits for direct payment of agency and court fees.'") (quoting Culbertson v. Berryhill, U.S., 139 S.Ct. 517, 523 (2019)).
II. DISCUSSION
The Social Security Act provides:
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, and the Commissioner of Social Security may, notwithstanding the provisions of section 405(i) of this title, but subject to subsection (d) of this section, 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. In case of any such judgment, no other fee may be payable or certified for payment for such representation except as provided in this paragraph.42 U.S.C. § 406(b)(1)(A).
When considering a motion for attorney's fees pursuant to § 406(b), the court first determines whether it was timely made, see Sinkler v. Berryhill, 932 F.3d 83, 87-88 (2d Cir. 2019), and then reviews the request for reasonableness. Section 406(b) "does not displace contingent-fee agreements as the primary means by which fees are set for successfully representing Social Security benefits claimants in court." Gisbrecht v. Barnhart, 535 U.S. 789, 807 (2002). Rather, it "calls for court review of such arrangements as an independent check, to assure that they yield reasonable results in particular cases." Id. "Factors to be considered when determining whether an award is reasonable include: (a) whether the contingency fee is within the twenty-five percent limit; (b) whether the retainer was the result of fraud or overreaching by the attorney; and (c) whether the attorney would enjoy a windfall relative to the services provided." Pelaez v. Berryhill, 2017 WL 6389162, at *1 (S.D.N.Y. Dec. 14, 2017) (internal citations and quotation marks omitted), report and recommendation adopted, 2018 WL 318478 (S.D.N.Y. Jan. 3, 2018); accord Wells v. Sullivan, 907 F.2d 367, 372 (2d Cir. 1990).
A. Timeliness
"Once a successful claimant receives notice of the Commissioner's award on remand," claimant has "the fourteen days afforded by Rule 54(d)(2)(B) to file a § 406(b) motion for attorney's fees." Sinkler, 932 F.3d at 87, 89 n. 5 (noting "the law's presumption that a party receives communications three days after mailing" (emphasis added)). Here, The SSA notified plaintiff of an award in his favor by letter dated August 5, 2023. Binder Aff. Ex. C. B&B filed its fee motion 17 days later, on August 22. (Dkt. 24.) Thus, the motion was timely. See Sinkler, 932 F.3d at 87.
B. Reasonableness
The reasonableness factors weigh in favor of plaintiff's request for approval. The contingency fee is within the 25% statutory limit. 42 U.S.C. § 406(b)(1)(A). It is also less than B&B was entitled to request under its Retainer Agreement, in which plaintiff agreed that if the case were remanded and if he obtained an award of past due benefits, "the law firm may apply for fees under 42 U.S.C. § 406(a) and/or § 406(b)," provided that the "combined amount of these fees will not exceed 25% of any back due benefits due to me and my family." Retainer Ag. ¶ 3. There is no evidence in the record that the Retainer Agreement was the result of fraud or overreach. Nor is there any evidence that plaintiff has been awarded additional sums under § 406(a) that would cause his total award to exceed 25% of the back due amount.
42 U.S.C. § 406(a) permits the Commissioner (not the Court) to award a "reasonable fee" to compensate the attorney for representing a successful claimant before the agency. Plaintiff's counsel states that he "plans to seek approval of fees from the Social Security Administration" for work performed before the agency, but that "[t]he total requested fees between 42 U.S.C. § 406(a) and § 406(b) will not exceed 25% of any retroactive benefits awarded to Plaintiff now or in the future." Binder Aff. ¶ 13.
The Court therefore considers whether an award of $14,000, for the minimal work performed on this docket, "is so large as to be a windfall." Wells, 907 F.2d at 372. B&B acknowledges that it expended only 7.3 hours on this case, because "no motions or briefs were filed in the District Court, only a Court ordered settlement letter," which "required counsel to do some legal research and review of the facts by filing." Pl. Mem. (Dkt. 24-2) at 3. It is for this reason (and, no doubt, because of the planned application to the SSA pursuant to § 406(a)), that the firm requests fees in the amount 14% of plaintiff's past due benefits rather than the full 25% potentially available under § 406(b) and the Retainer Agreement. Id.
B&B's time records show that Charles E. Binder recorded 1.9 hours on this action, while Daniel S. Jones recorded 5.4 hours. Binder Aff. Ex. B. If the total hours recorded (7.3) are divided into the $14,000 sought, the result implies a de facto hourly rate of $1,918. Although such a rate would be "difficult to justify" in a social security case "as part of a traditional 'lodestar' analysis," the courts have made it clear that "a 'lodestar' analysis does not apply" in § 406(b) applications. Baron v. Astrue, 311 F.Supp.3d 633, 637 (S.D.N.Y. 2018). "[E]ven 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); see King v. Kijakazi, 2023 WL 1782032 (D.N.H. Feb. 6, 2023) (reducing contingency fee from 25% to 12.5% for an award of $12,000 at a de facto rate of $2,927 per hour, where counsel recorded just 4.1 hours because commissioner agreed to remand "[a]lmost immediately" after counsel filed a "two-page, form complaint").
Before reducing a fee award on "windfall" grounds, our Circuit requires that the court consider:
(i) the "ability and expertise of the lawyers and whether they were particularly efficient, accomplishing in a relatively short amount of time what less specialized or less well-trained lawyers might take far longer to do";
(ii) "the nature and length of the professional relationship with the claimant -including any representation at the agency level";
(iii) "the satisfaction of the disabled claimant"; and
(iv) "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 854-56.
Attorney Jones is an experienced litigator with over a decade of experience "exclusively in the area of federal court appeals of Social Security disability claims." Binder Aff. ¶ 8 ("Prior to becoming an attorney, Mr. Jones spent 8 years working as a non-attorney representative of claimants appearing before the SSA at all levels of the administrative process."). Jones is the coauthor of a social security practice guide for the New York State Bar Association. Id. Attorney Binder is also an experienced litigator, who has handled "thousands of administrative hearings and federal trials." Id. ¶ 10. Consequently, the factor concerning the "ability and expertise of the lawyers" furnishes no basis for reducing the requested fee.
B&B has represented plaintiff since April 2018. Binder Aff. ¶ 1. While the Court has not received (and does not expect) a testimonial from plaintiff Mannouris, the fact that the attorney-client relationship continued for almost five years, until the claimant was awarded past due benefits in the aggregate amount of $99,493, indicates that neither the nature and length of the professional relationship, nor the satisfaction of the claimant, would raise grounds for reducing B&B's fee award.
With regard to the "uncertainty" factor, there is never any guarantee that a contingency case will be successful. "Lawyers who operate on contingency - even the very best ones - lose a significant number of their cases and receive no compensation when they do." Fields, 24 F.4th at 855; see also Wells, 907 F.2d at 371 ("[P]ayment for an attorney in a social security case is inevitably uncertain, and any reasonable fee award must take account of that risk."); accord Nieves v. Colon, 2017 WL 6596613, at *2 (S.D.N.Y. Dec. 26, 2017). Here, there was there "was great uncertainty regarding whether Mr. Mannouris would be found disabled given the multiple denials of his claim for benefits." Pl. Mem. at 3. Still, B&B persisted in its representation.
Although counsel succeeded after spending a relatively short amount of time on the case, that does not signify that the case appeared inherently less risky, when counsel were engaged, than others like it. Nor should the Court penalize counsel at the fee stage for achieving a good result in an efficient manner. Accordingly, I conclude that the $14,000 now requested does not constitute a windfall to plaintiff's counsel.
As acknowledged by B&B (Binder Aff. ¶ 12), upon receipt of the $14,000 award pursuant to § 406(b), the firm must remit the amount the Court already awarded for fees under EAJA ($1,600.99). See Gisbrecht v. Barnhart, 535 U.S. 789, 789 (2002) ("Fee awards may be made under both [section 406(b) and the EAJA], but 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."). Thus, "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).'" Guzman v. Comm'r of Soc. Sec., 2019 WL 4935041, at *3 (S.D.N.Y. Aug. 1, 2019) (quoting Jackson v. Astrue, 2011 WL 1868718, at *2 (E.D.N.Y. May 16, 2011), and collecting cases) (emphasis added), report and recommendation adopted, 2019 WL 4933596, at *1 (S.D.N.Y. Oct. 7, 2019).
III. CONCLUSION
For the reasons set forth above, I recommend that plaintiff's unopposed motion be GRANTED, and that plaintiff be awarded the sum of $14,000 in attorneys' fees pursuant to 42 U.S.C. § 406(b), to be paid from the monies retained by the Commissioner for that purpose. Counsel should be directed, in turn, to remit to Mr. Mannouris $1,600.99, the sum previously awarded under EAJA.
NOTICE OF PROCEDURE FOR FILING OF OBJECTIONS TO THIS REPORT AND RECOMMENDATION
The parties shall have fourteen days from the service of this report and recommendation to file written objections pursuant to 28 U.S.C. § 636(b)(1) and Rule 72(b) of the Federal Rules of Civil Procedure. See also Fed.R.Civ.P. 6(a), (d). A party may respond to another party's objections within fourteen days after being served with a copy. Fed.R.Civ.P. 72(b)(2). Any such objections shall be filed with the Clerk of the Court, with courtesy copies delivered to the Hon. Analisa Torres at the Daniel Patrick Moynihan United States Courthouse 500 Pearl Street, New York, New York 10007, and to the chambers of the undersigned Magistrate Judge. Any request for an extension of time to file objections must be directed to Judge Schofield. Failure to file timely objections will preclude appellate review. See Thomas v. Arn, 474 U.S. 140, 155 (1985); Frydman v. Experian Info. Sols., Inc., 743 Fed.Appx. 486, 487 (2d Cir. Nov. 27, 2018); Wagner & Wagner, LLP v. Atkinson, Haskins, Nellis, Brittingham, Gladd & Carwile, P.C., 596 F.3d 84, 92 (2d Cir. 2010).