Opinion
1:18-cv-07137 (AT) (SDA)
06-02-2021
Jerry J. Kowal, Plaintiff, v. Nancy Berryhill, Commissioner, Social Security Administration, Defendant.
REPORT AND RECOMMENDATION
STEWART D. AARON, UNITED STATES MAGISTRATE JUDGE
TO THE HONORABLE ANALISA TORRES, UNITED STATES DISTRICT JUDGE:
Before the Court is a motion for attorney's fees, pursuant to the Social Security Act (the “Act”), 42 U.S.C. § 406(b)(1), by plaintiff's counsel, Mark J. Keller, Esq. (“Keller”). (Not. of Mot., ECF No. 37.) The motion follows a favorable decision for plaintiff, Jerry J. Kowal (“Plaintiff” or “Kowal”), by defendant, Commissioner of the Social Security Administration (“Commissioner”), after the parties stipulated to remand this case to the Commissioner. (Stip. & Order, ECF No. 19.)
For the reasons set forth below, I recommend that the motion be GRANTED IN PART and DENIED IN PART and the Court award attorney's fees to Keller in the amount of $23,086.50.
BACKGROUND
After Kowal was denied a claim for Disability Insurance Benefits (“DIB”) and Supplemental Security Income (“SSI”) benefits by an Administrative Law Judge and the Social Security Appeals Council, Keller represented him before the District Court. (See Compl., ECF No. 1.) On July 30, 2018, Kowal entered into a contingency fee agreement with Keller providing that, if the litigation was successful, Keller would be entitled to twenty-five percent of past-due benefits as an attorney's fee to be paid out of the benefits awarded. (Retainer Agreement, ECF No. 37-7, ¶¶ 2-3.) On October 9, 2019, upon stipulation of the parties, the case was remanded to the Commissioner (see 10/9/19 Order, ECF No. 32), which resulted in a fully favorable decision in Plaintiff's favor. (Keller Decl., ECF No. 37-2, ¶ 3.)
Also referred to as Social Security Disability or SSD.
Thereafter, the Social Security Administration (“SSA”) issued two award notices, as well as a subsequent notice. On February 2, 2021, the first award notice was issued, which related to SSI benefits. (Keller Decl. ¶ 5; 2/2/21 Award Notice, ECF No. 37-4.) The total amount of past due SSI benefits awarded to the Plaintiff was $40,866.00. (See 2/2/21 Award Notice at 2.) On April 5, 2021, the second notice of award was issued, which related to DIB benefits. (Keller Decl. ¶ 6; 4/5/21 Award Notice, ECF No. 37-5.) The total amount of past due DIB benefits awarded to the Plaintiff was $88,681.00. (Keller Decl. ¶ 6; Comm'r Ltr., ECF No. 40, at 2.)
The Keller Declaration erroneously states that the SSI benefits awarded were in the amount of $40,746.00. (See Keller Decl. ¶ 6.)
On April 14, 2021, Keller filed the instant motion for attorney's fees, pursuant to 42 U.S.C. § 406(b)(1). (See Notice of Mot.) Keller initially sought attorney's fees in the amount of $32,356.00, and stated that this amount “represents twenty-five percent of the total past due benefits.” (Keller Decl. ¶ 11.) Upon receipt of this sum, Keller pledged to refund the previously awarded EAJA fees of $10,000.00 directly to Plaintiff. (Keller Decl. ¶ 12.)
Based on the successful appeal in the District Court, Keller had sought an award of attorney's fees under the Equal Access to Justice Act, 28 U.S.C. § 2412 (“EAJA”). Thereafter, Keller was awarded $10,000.00 in fees. (Stip. & Order, ECF No. 36.)
On May 7, 2021, the SSA issued a notice relating to Plaintiff's SSI benefits. (5/7/21 Notice, ECF No. 40-1.) The May 7 notice states that, out of the $40,866.00 in SSI past-due benefits, only $3,665.00 is eligible for the attorney's fee calculation due to an DIB offset and that 25% of this amount, or $916.25, was being withheld from the SSI award for the payment of an attorney's fee. (See 5/7/21 Notice at 1.)
On May 19, 2021, the Commissioner filed a response to the fees motion currently before the Court. (See Comm'r Ltr.) The Commissioner references, and files with the Court, the SSA May 7 notice that was sent after the instant motion was filed. (See id. at 2; 5/7/21 Notice.) The Commissioner states that, because of the May 7 notice, the total amount of past due benefits being withheld for payment of attorney's fees is $23,086.50, and that the Commissioner does not object to payment of this amount. (See Comm'r Ltr. at 2.)
On May 21, 2021, I entered an Order requiring Plaintiff's counsel to file a letter stating whether he objected to reducing his fee request to the sum of $23,086.50. (See 5/21/21 Order, ECF No. 41.) By letter, dated June 1, 2021, Plaintiff's counsel filed a letter acknowledging that the total fee to which he was entitled was $23,086.50 and requesting that he be awarded that amount. (See Pl.'s 6/1/21 Ltr., ECF No. 44.)
DISCUSSION
I. Legal Standards
Section 206(b)(1)(A) of the 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
. . . 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).
“[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) (internal citations omitted).
Among the factors to be considered when determining whether an award is reasonable are: (a) whether the contingency fee is within the twenty-five percent limit; and (b) whether the retainer was the result of fraud or overreaching by the attorney. See Wells, 907 F.2d at 372. Other factors to be considered are: (1) whether the requested fee is out of line with the character of the representation and the results the representation achieved; (2) whether the attorney unreasonably delayed the proceedings in an attempt to increase the accumulation of benefits and thereby increase his own fee; and (3) whether the benefits awarded are large in comparison to the amount of time counsel spent on the case, the so-called “windfall” factor. See Brown v. Colvin, No. 15-CV-04823 (SDA), 2018 WL 6061199, at *3 (S.D.N.Y. Nov. 20, 2018).
With respect to the “windfall” factor, courts consider: (1) whether the attorney's efforts were particularly successful for the plaintiff, (2) whether there is evidence of the effort expended by the attorney demonstrated through pleadings which were not boilerplate and through arguments which involved both real issues of material fact and required legal research, and (3) whether the case was handled efficiently due to the attorney's experience in handling social security cases. See Brown, 2018 WL 6061199, at *3.
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 v. Barnhart, 535 U.S. 789, 796 (2002) (citation omitted).
II. Application
As noted above, Keller now seeks an award of attorney's fees in the amount of $23,086.50. (See Pl.'s 6/1/21 Ltr.) This amount is equivalent to the twenty-five percent limit imposed by statute and there is no evidence of fraud or overreaching. Moreover, the Court finds that none of the other factors warrant a reduction in the fee amount.
Keller is requesting $23,086.50 for 62.2 hours of services rendered before this Court, which represents a de facto hourly rate of $371.16. The requested fees are not out of line with the character of the representation and the successful results achieved. Upon review of Keller's time records (Time Records, ECF No. 37-6), the Court finds that the number of hours spent on this matter by Keller was not unreasonable under the circumstances. In addition, the de facto hourly rate of $371.16 is more than reasonable. See, e.g., Ackerman v. Comm'r of Soc. Sec. Admin., No. 13-CV-06675 (SDA), 2019 WL 5417210, at *2 (S.D.N.Y. Oct. 23, 2019) (finding fees of $26,283.00 for 56.1 hours, resulting in hourly rate of $468, to be reasonable); Cahill v. Colvin, No. 12-CV-09445 (PAE) (MHD), 2016 WL 4581342, at *3 (S.D.N.Y. Sep. 2, 2016) (finding fees of $13,875.83 for 28.8 hours, resulting in hourly rate of $481.80, to be reasonable).
CONCLUSION
For the reasons set forth above, I respectfully recommend that Keller's motion for attorney's fees (ECF No. 37) be GRANTED IN PART and DENIED IN PART. Specifically, I recommend that Keller be awarded the sum of $23,086.50 in attorney's fees and that the EAJA fees in the amount of $10,000.00 be returned to Plaintiff from the award made by the Court.
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. 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 Torres.
THE FAILURE TO OBJECT WITHIN FOURTEEN (14) DAYS WILL RESULT IN A WAIVER OF OBJECTIONS AND WILL PRECLUDE APPELLATE REVIEW. 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).