Opinion
1:13-cv-06903 (PGG) (SDA)
12-28-2017
Lashawn S. McDonald, Plaintiff, v. Acting Commissioner Carolyn W. Colvin, Defendant.
REPORT AND RECOMMENDATION
STEWART D. AARON, UNITED STATES MAGISTRATE JUDGE.
TO THE HONORABLE GEORGE B. DANIELS, UNITED STATES DISTRICT JUDGE:
Before the Court is a motion for attorney's fees, pursuant to the Social Security Act (“SSA”), 42 U.S.C. 406(b), by plaintiff's counsel, the Olinsky Law Group (“Olinsky”). The motion follows a favorable decision for the plaintiff by defendant Commissioner of Social Security (“Commissioner”), after remand of this case to the Commissioner by your Honor. For the reasons set forth below, I recommend that the Court award attorney's fees to Olinsky in the amount of $1373.20.
BACKGROUND
Plaintiff Lashawn S. McDonald (“McDonald”) filed an application for Supplemental Security Income (“SSI”) benefits. McDonald's application was denied in a final administrative decision issued on behalf of the Commissioner on June 27, 2013 (the “Decision”). (Compl. ¶¶ 13 (ECF No. 1).) On August 16, 2013, McDonald entered into a Fee Agreement with Olinsky to have Olinsky represent her in seeking federal court review of the Decision. Under the terms of the Fee Agreement, “if [Olinsky] wins [McDonald's] case in federal court, ” such as having her case remanded to the Social Security Administration, Olinsky may receive an award of attorney's fees
for work performed at the federal court, pursuant to the Equal Access to Justice Act (“EAJA”). (Ex. A to Aff. In Supp. of Mot. for Attorney's Fees (“Olinsky Aff.”), ECF No. 24-1 at 2, ¶ 2.) The Agreement also provides that Olinsky “has the right to ask the court to award any remaining balance of 25% of [McDonald's] past-due benefits” for representing her in federal court. (Id.) In addition, the Agreement states that “if the court awards my federal court attorney a fee out of my past-due benefits and also awards an EAJA fee for that same work, my federal court attorney must refund the smaller fee to me.” (Id.)
On September 27, 2013, McDonald filed her Complaint in this action, alleging that the Commissioner's “conclusions and findings of fact” were “not supported by substantial evidence and are contrary to law and regulation.” (Compl. ¶ 8, ECF No. 1.) Pursuant to a Stipulation entered into between the parties, this action was remanded to the Commissioner, under sentence four of 42 U.S.C. 405(g), for further administrative proceedings, and judgment was entered by the Clerk of Court on July 24, 2014. (ECF Nos. 14 &15.)
On September 19, 2014, Olinsky attempted to file a motion for an award of attorney's fees pursuant to EAJA, but due to a filing error, the motion was terminated. (ECF No. 16.) On September 15, 2015, Olinsky filed a “Notice of Withdrawal” of his EAJA fees motion. (ECF No. 20.) The reason given for the withdrawal was that “recent decisions in this Court have all ruled [Olinsky's] timekeeping system was inadequate prior to August 28, 2014, and only after that date did my firm come into compliance with the Second Circuit precedents regarding contemporaneous timekeeping.” (Id.) Olinsky stated that “the only time properly contemporaneously tracked in this case under Second Circuit Precedent via the firm's new timekeeping system was the 2.4 hours preparing the EAJA motion, ” and thus “waived” any recovery under the EAJA due to the small amount at issue. (See id.) Olinsky stated that it would “be filing a 406b motion for attorney fees should the claimant be awarded benefits at the remand hearing.” (Id.) After the remand hearing, in a Notice of Award, dated April 3, 2016, McDonald was awarded past-due benefits in the amount of $46,496.00. (Olinsky Aff., ECF No. 24 ¶ 4 &Ex. B.)25% of the past-due benefits equals $11,624.00.
At the time the Notice of Withdrawal was filed, the filing error had not been rectified, such that the EAJA fees motion was not then pending on the Court's ECF system.
The Government correctly notes that pages 2 and 3 of the Notice of Award are missing from ECF No. 24-2, but does not take issue with the amount of past-due benefits that Olinsky claims were awarded. (See Letter dated July 5, 2017 from Susan Baird, ECF No. 25 at 2, n. 2.)
Olinsky filed the instant motion on June 21, 2017, seeking an award of attorney's fees in the amount of $5624.00, pursuant to 42 U.S.C. 406(b). Olinsky arrived at this number by deducting the $6000.00 paid to the so-called “Agency attorney” (who represented McDonald at the “post-litigation hearing”) from the $11,624.00 amount. (Olinsky Aff., ECF No. 24 ¶ 6.)
The time records submitted in support of Olinsky's 42 U.S.C. 406(b) motion are identical to those previously submitted in support of its terminated EAJA fees motion. (Compare Olinsky Aff. Ex. C, ECF No. 24-3, at 2-3 with Mot. for Attorney's Fees Pursuant to EAJA, ECF No. 16-1, at 12-13.)
By a letter dated July 5, 2017, the Commissioner responded to Olinsky's motion stating, inter alia, that, in determining whether the amount sought is reasonable, the Court “may consider that counsel's fee request amounts to an hourly rate of $815.07.” (ECF No. 25 at 2.) The Commissioner further states that the Court “may also consider that plaintiff's fee petition was filed on June 21, 2017, more than a year after the April 5, 2016 Notice of Award Letter from Commissioner.” (Id.)
This case was reassigned to me on December 22, 2017.
DISCUSSION
Section 406(b) 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 ... 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).
“Most plausibly read ... 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. Rather, 406(b) calls for court review of such arrangements as an independent check, to assure that they yield reasonable results in particular cases.” Gisbrecht v. Barnhart, 535 U.S. 789, 807, 122 S.Ct. 1817, 1828 (2002). “[W]here there is a contingency fee agreement in a successful social security case, the district court's determination of a reasonable fee under 406(b) must begin with the agreement, and the district court may reduce the amount called for by the contingency agreement only when it finds the amount to be unreasonable.” Wells v. Sullivan, 907 F.2d 367, 371 (2d Cir. 1990). 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. See Wells, 907 F.2d at 372.
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, 122 S.Ct. at 1822 (internal quotation marks and citation omitted). “Under EAJA, a party prevailing against the United States in court, including a successful Social Security benefits claimant, may be awarded fees payable by the United States if the Government's position in the litigation was not ‘substantially justified.'” Id. (citation omitted) (emphasis supplied). Here, since Olinsky “withdrew” his EAJA fees motion, McDonald was deprived of the opportunity to obtain a refund of any EAJA fee recovery.
In the present case, the contingency fee sought by Olinsky (when combined with the fees paid to the Agency attorney) is within the twenty-five percent limit imposed by statute. Moreover, there is no evidence that the Agreement entered into by the McDonald with Olinsky was the result of fraud or overreaching. The Court, however, must consider whether Olinsky would enjoy a windfall relative to the services he provided.
As noted above, Olinsky seeks an award of attorney's fees in the amount of $5624.00. In support of its claim, the law firm has provided information concerning Howard Olinsky's qualifications and experience, including the facts that: (1) he has practiced Social Security law since 1986; (2) his firm has represented over 15, 000 claimants before the Social Security Administration; and (3) his firm has handed over 1500 Social security cases in United States District Court. (Olinsky Aff., ECF No. 24, ¶ 8.) Olinsky also provided a document reflecting the 6.9 hours Howard Olinsky claims to have worked on the McDonald matter.(Olinsky Aff. Ex. C, ECF No. 24-3.) However, 2.4 of the 6.9 hours were spent on preparing the EAJA motion that was later withdrawn. (ECF No. 24-3, at 2.)Deducting those 2.4 hours, Olinsky by its own records only worked 4.5 hours on the matter. If Olinsky were to recover $5614.00 in attorney's fees, this would amount to an hourly rate of $1247.56, which would amount to a windfall. See Whittico v. Colvin, 5:09-CV-907 (FJS/DRH), 2014 WL 1608671, at *5-6 (N.D.N.Y. Apr. 22, 2014) (finding, in another case involving Olinsky, effective hourly rate of $1100.62 to be a windfall).
As discussed above, Olinsky has admitted that the hours recorded in this document were not based upon contemporaneous time records. (See Notice of Withdrawal, ECF No. 20.)
This Court, like Chief Judge Geraci in the Western District of New York, will not credit Olinsky with the hours spent on the EAJA motion. See Cotto v. Berryhill, Case No.13-CV-6581-FPG, Case No. 14-CV-6461-FPG, 2017 WL 3033066, at *3 (W.D.N.Y. July 17, 2017) (“More fundamentally, of the 2.9 hours listed after August 28, 2014, 2.7 of those hours were for preparation of Mr. Olinsky's EAJA motion. In other words, the hours are being expended (and sought to be reimbursed) for preparing a motion for payment of hours that were not recorded contemporaneously, and therefore not compensable, in the first place.”).
This case has other similarities to Whittico. For example, in Whittico, the Court noted that “the work that Plaintiff's counsel expended before [the] Court was minimal and, primarily, routine in nature. He did not file a legal brief in this case regarding the merits of Plaintiff's claims because the Court, as a result of the parties' stipulation, remanded this case pursuant to sentence six of 405(g).” 2014 WL 1608671, at *6. In the present case, Olinsky filed a bare-bones 2-page Complaint (ECF No. 1), and also did not file a legal brief, since the parties stipulated to remand. (ECF No. 14.)
The Court is mindful that “a reduction in the agreed-upon contingency amount should not be made lightly, ” Blizzard v. Astrue, 496 F.Supp.2d 320, 325 (S.D.N.Y. 2007), particularly given “the importance of encouraging attorneys to accept social security cases on a contingency basis.” (Id.) However, the Court recommends that a reduction be made in this case. With respect to the amount of the reduction, there is a range of hourly rates that courts in this Circuit have found to be reasonable. See Insel v. Commissioner of Social Security, 5:13-CV-903, 2017 WL 6558585, at *1 (N.D.N.Y. Dec. 22, 2017) (discussing hourly rates found to be reasonable of $386.00, $416.60, $650.00 and $743.30). Olinsky in its Reply Memorandum (ECF No. 26) cites to Blizzard, 496 F.Supp.2d at 324, as supporting the reasonableness of a $705.00 hourly rate. Taking into account the amount of work that Olinsky did in this Court, counsel's expertise in handling social security cases, the success achieved in this case, and the lack of any evidence of fraud or overreaching, the Court concludes that an award of attorney's fees at an effective hourly rate of $600.00 for the 4.5 hours that Olinsky worked is reasonable, subject to the EAJA fees adjustment discussed below.
There remains an issue concerning the unavailability to McDonald of a refund for the EAJA fees that were not recovered from the Government due to Olinsky's failure to properly make its EAJA fees motion. As aptly put by Northern District of New York Judge Sharpe in another case involving Olinsky:
In determining whether the requested fees pursuant to 406(b) are reasonable, the court is entitled to take into account counsel's failure to timely file a colorable EAJA application. See, e.g., Fura v. Astrue, No. 08-CV-0689, 2011 WL 1541307, at *2 (N.D.N.Y. Apr.21, 2011); Garland v. Astrue, 492 F.Supp.2d 216, 223 n. 6 (E.D.N.Y.2007); lliceto v. Sec'y of Dep't of Health &Human Servs., No. CV-83-2160, 1990 WL 186254, at *1 (E.D.N.Y. Nov. 14, 1990) (reducing the amount of the 406(b) award by the amount that would have been obtained under the EAJA); Losco v. Bowen, 638 F.Supp. 1262, 1268 (S.D.N.Y.1986) (“Having foregone an opportunity to seek fees from the Secretary under the EAJA, counsel will not be permitted to obtain a bonus for that shortcoming in the form of a premium fee deducted from his client's past-due benefits.”). The court agrees with other courts in this Circuit that the fees should be reduced. Indeed, a successful application for EAJA fees “saves the plaintiff money [, and i]f the attorney could have received EAJA fees but failed to apply for them, it is unfair to make the plaintiff bear the burden of this error.” Iliceto, 1990 WL 186254, at *1; see Allen v. Comm'r of Soc. Sec., No. 10 Civ. 0068, 2012 WL 1596661, at*4-6 (S.D.N.Y. Apr. 27, 2012).Blair v. Colvin, 5:11-CV-404 (GLS/GHL), 2014 WL 3891321, at *1 (N.D.N.Y. Aug. 7, 2014).
In its terminated EAJA motion, Olinsky had sought an award of attorney's fees in the amount of $1326.80. (ECF No. 16.) Thus, the Court recommends that this amount (i.e., $1326.80) be deducted from the attorney's fees that otherwise would have been awarded to Olinsky (i.e., $2700.00 [4.5 hours at $600 per hour]). This Court therefore recommends that $1373.20 in attorney's fees be awarded to Olinsky.
CONCLUSION
For the foregoing reasons, the Court recommends that Olinsky's motion for attorney's fees (ECF No. 23) be granted in the amount of $1373.20.
NOTICE OF PROCEDURE FOR FILING OBJECTIONS TO THIS REPORT AND RECOMMENDATION
The parties shall have fourteen (14) days (including weekends and holidays) from 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) (adding three additional days when service is made under Fed.R.Civ.P. 5(b)(2)(C), (D) or (F)). 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). Such objections, and any response to objections, shall be filed with the Clerk of the Court, with courtesy copies delivered to the chambers of the Honorable Paul G. Gardephe and the undersigned at the United States Courthouse, 500 Pearl Street, New York, New York 10007, and to any opposing parties. See 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 6(a), 6(d), 72(b). Any requests for an extension of time for filing objections must be addressed to Judge Gardephe.
THE FAILURE TO FILE THESE TIMELY OBJECTIONS WILL RESULT IN A WAIVER OF THOSE OBJECTIONS FOR PURPOSES OF APPEAL. See 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 6(a), 6(d), 72(b); Thomas v. Arn, 474 U.S. 140 (1985).