Opinion
Case No. 13-CV-513-GKF-FHM
02-29-2016
SABINA O. CORREA, Plaintiff, v. CAROLYN W. COLVIN, Acting Commissioner, Social Security Administration, Defendant.
REPORT AND RECOMMENDATION
The Motion for Attorney Fees Pursuant to 42 U.S.C. § 406(b), [Dkt. 29], filed by Plaintiff's counsel has been referred to the undersigned United States Magistrate Judge for report and recommendation.
Counsel seeks approval of an attorney fee award of $7,174.50 pursuant to the terms of 42 U.S.C. § 406(b) and the contingency fee contract between Plaintiff and counsel. Counsel has certified that Plaintiff has been advised of the fee request, and Plaintiff has expressed he does not object to the requested fee award. [Dkt. 32].
Plaintiff appealed the Administrative denial of his application for Social Security benefits to this Court. The Court reversed the administrative denial of Plaintiff's application for benefits and remanded the case to the Commissioner for further proceedings. The Court granted Plaintiff's application for an award of $4,997.70 in fees under the Equal Access to Justice Act (EAJA), 28 U.S.C. § 2412, for the work counsel performed before the Court. [Dkt. 26]. The EAJA award was paid by the Social Security Administration, at no cost to Plaintiff.
On remand the Commissioner determined that Plaintiff was entitled to disability benefits, including an award of past due benefits. The letter from the Social Security Administration that was provided with the motion for fees reflects $13,174.50 was being withheld out of past due benefits for payment of attorney fees. Plaintiff's counsel has been paid $6,000.00 for fees rendered at the administrative level pursuant to 42 U.S.C. § 406(a) which leaves a balance of $7,174.50 available for attorney fees rendered at the judicial level.
Section 406(b)(1) allows an award of attorney fees, payable from the past due benefits withheld by the Social Security Administration, when the district court has remanded a Title II Social Security case for further proceedings and benefits are awarded on remand. McGraw v. Barnhart, 450 F.3d 493 (10th Cir. 2006). 42 U.S.C. § 406(b)(1)(A) provides that a court may award "a reasonable fee . . . not in excess of 25 percent of the . . . past due benefits" awarded to the claimant. The fee is payable "out of, and not in addition to, the amount of the [the] past-due benefits." Section 406(b)(1)(A) does not replace contingency fee agreements between Social Security claimants and their counsel. Instead, that section requires the district court to review contingency fee agreements as an "independent check" to assure that the agreement yields a reasonable result. Gisbrecht v. Barnhart, 535 U.S. 789, 807, 122 S.Ct. 1817, 1828, 152 L.Ed.2d 996 (2002). Section 406(b) provides a boundary that agreements are unenforceable to the extent that they provide for fees exceeding 25 percent of the past-due benefits. Id.
In determining whether a fee resulting from a contingency fee contract is reasonable, it is appropriate to adjust the attorney's recovery based on the character of the representation and the results the representation achieved. A reduction is in order if the attorney is responsible for delay, so the attorney will not profit from the accumulation of past-due benefits while the case is pending in court. In addition, if the benefits are large in comparison to the amount of time counsel spent on the case, the fee award may be adjusted. Id. 535 U.S. at 808, 122 S.Ct. at 1828. Further, the burden to prove the fee is reasonable is placed upon the attorney seeking the fee. Id. at n.17.
The undersigned concludes that the requested fee award of $7,174.50 which is approximately 13.3% of Plaintiff's past due benefit award as reflected in the record submitted is reasonable. That award comports with the contract between counsel and Plaintiff and is within the statutory limits of §406(b). The fee yields an hourly rate of approximately $285.84 per hour for 25.1 hours of work performed before the district court, which does not amount to a windfall. Often a fee recovery in a percentage-based contingency fee contract will be higher than the fee produced by a straight hourly rate agreement. That circumstance serves to induce attorneys to risk providing legal services in cases where they may not be paid. And finally, when the amount of the EAJA fee award, $4,997.70, is returned to Plaintiff in accordance with Weakley v. Brown, 803 F.2d 575, 580 (10th Cir. 1986), the net result is an out-of-pocket payment from Plaintiff of $2,176.80 which is 4% percent of his past due benefits.
The undersigned RECOMMENDS that Plaintiff's Attorney's Motion for an Award of Attorney Fees Under 42 U.S.C. § 406(b), [Dkt. 37] be GRANTED as follows:
Counsel is awarded $7,174.50 to be paid from Plaintiff's past due benefits being withheld by the Commissioner for attorney fees. In accordance with Weakley v. Brown, 803 F.2d 575, 580 (10th Cir. 1986), upon receipt of payment, counsel is required to refund $4,997.70 to Plaintiff, which is the amount of the EAJA award.
In accordance with 28 U.S.C. §636(b) and Fed. R. Civ. P. 72(b)(2), a party may file specific written objections to this report and recommendation. Such specific written objections must be filed with the Clerk of the District Court for the Northern District of Oklahoma on or before March 14, 2016.
If specific written objections are timely filed, Fed.R.Civ.P. 72(b)(3) directs the district judge to:
determine de novo any part of the magistrate judge's disposition that has been properly objected to. The district judge may accept, reject, or modify the recommended disposition; receive further evidence; or return the matter to the magistrate judge with instructions.See also 28 U.S.C. § 636(b)(1).
The Tenth Circuit has adopted a "firm waiver rule" which "provides that the failure to make timely objections to the magistrate's findings or recommendations waives appellate review of factual and legal questions." United States v. One Parcel of Real Property, 73 F.3d 1057, 1059 (10th Cir. 1996) (quoting Moore v. United States, 950 F.2d 656, 659 (10th Cir. 1991)). Only a timely specific objection will preserve an issue for de novo review by the district court or for appellate review.
DATED this 29th day of February, 2016.
/s/ _________
FRANK H. McCARTHY
UNITED STATES MAGISTRATE JUDGE