Opinion
Civ. No. 19-1407 (MDM)
2022-12-19
Ernesto DE JESÚS LÓPEZ, Plaintiff, v. COMMISSIONER OF SOCIAL SECURITY, Defendant.
Pedro G. Cruz-Sanchez, Pedro G. Cruz-Sanchez Law Office, Cayey, PR, for Plaintiff. Enrique Silva-Aviles, United States Attorneys Office District of Puerto Rico, San Juan, PR, for Defendant.
Pedro G. Cruz-Sanchez, Pedro G. Cruz-Sanchez Law Office, Cayey, PR, for Plaintiff. Enrique Silva-Aviles, United States Attorneys Office District of Puerto Rico, San Juan, PR, for Defendant. OPINION AND ORDER MARSHAL D. MORGAN, United States Magistrate Judge
Pending before the Court is counsel for the plaintiff's "Petition for authorization of an attorney fee pursuant to the Social Security Act § 206(b)." (Docket No. 32). In his petition, counsel requests that the Court authorize attorney fees in the amount of $15,000 for his work representing the plaintiff in federal court pursuant to 42 U.S.C. § 406(b). For the reasons set forth below, the petition is DENIED.
I. Procedural and Factual Background
On April 29, 2019, plaintiff Ernesto de Jesús López filed the present action in which he challenged the denial of his petition for Social Security disability insurance benefits. (Docket No. 1). The Commissioner of the Social Security Administration (the "Commissioner") responded to plaintiff's complaint. (Docket No. 13). The Commissioner later filed a "Consent motion for remand" pursuant to sentence four of 42 U.S.C. § 405(g), in which the agency requested that the Court reverse and vacate its prior decision to terminate plaintiff's disability insurance benefits under Sec. 205(u) of the Act, 42 U.S.C. § 405(u). (Docket No. 20). Pursuant to the Commissioner's "Consent motion for remand," the Court reversed and vacated the agency's final decision to terminate the plaintiff's benefits. The Court thus remanded the case pursuant to sentence four of 42 U.S.C. § 405(g) for further administrative proceedings. (Docket Nos. 21 and 22). Plaintiff's benefits were ordered to be reinstated retroactive to the date of termination, subject to the rules on eligibility for payment.
Subsequently, plaintiff's counsel filed a motion for attorney's fees pursuant to the Equal Access to Justice Act in the amount of $4,146.05. (Docket No. 23). The Commissioner responded to the motion by notifying the Court that it had no objection to the fee petition for the total sum requested. The fee petition was thus granted by the Court, as requested. (Docket No. 31). More than one year later, on September 13, 2021, counsel for the plaintiff filed the motion that is currently pending before the Court in which he requests attorney fees under the Social Security Act. The Commissioner filed an opposition to the fee request, arguing mainly that it is untimely.
II. Standard of Review: Fees payable in Social Security cases
In Social Security cases, the provisions governing fees for attorney representation are twofold: attorney fees can be obtained pursuant to the Equal Access to Justice Act and the Social Security Act.
A. Fees payable under the Equal Access to Justice Act
The Equal Access to Justice Act ("EAJA"), 28 U.S.C. § 2412(b), allows for recovery of "reasonable fees and expenses of attorneys" by the prevailing party in any civil action brought against any agency or official of the United States, including a successful Social Security benefits claimant. 28 U.S.C. § 2412(b) (Supp. 1993). See Gisbrecht v. Barnhart, 535 U.S. 789, 796, 122 S. Ct. 1817, 1822, 152 L. Ed. 2d 996 (2002). EAJA fees are determined not by a percent of the amount recovered, but by the "time expended" in the representation and the attorney's "[hourly] rate," § 2412(d)(1)(B), capped in the mine run of cases at $125 per hour. § 2412(d)(2)(A). So, EAJA fees, which are paid by the Social Security Administration, are calculated by multiplying the number of hours reasonably expended by counsel on the litigation and a reasonable hourly rate. Pennsylvania v. Delaware Valley Citizens' Council for Clean Air, 478 U.S. 546, 564, 106 S. Ct. 3088, 3097, 92 L. Ed. 2d 439 (1986).
B. Fees payable under the Social Security Act
Under 42 U.S.C. § 406(b)(1)(A), the Court may also award a reasonable fee to the attorney who successfully represented a social security claimant in court. The statute provides, in relevant part:
Whenever a court renders a judgment favorable to a claimant under [Title II of the Social Security Act] 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.42 U.S.C. § 406(b)(1)(A). Unlike the EAJA, however, § 406(b) does not authorize the prevailing party to recover fees from the losing party. "Section 406(b) is of another genre: it authorizes fees payable from the successful party's recovery." Gisbrecht, 535 U.S. at 795, 122 S.Ct. 1817. The fee is payable "out of, and not in addition to, the amount of past-due benefits." Id.
Two different provisions, 42 U.S.C. § 406(a) and 42 U.S.C. § 406(b), address different stages of representation and calculate fees differently. Section 406(b), which is the applicable section here, applies to court representation and imposes a flat twenty-five (25) percent cap on fees for court representation. Section 406(a) applies to representation before the agency and provides two methods for determining fees for agency representation.
In most cases, Social Security attorneys work "on contingency," which means that they collect a fee only if they win a claimant's disability claim. Typically, to get their fees paid, Social Security lawyers enter into written fee agreements with their clients and submit those fee agreements to the Social Security Administration for approval. Congress has provided one boundary line: agreements are unenforceable to the extent that they provide for fees exceeding twenty-five (25) percent (25%) of the past-due benefits. § 406(b)(1)(A) (1994 ed., Supp. V).
Specifically concerning the deadline for requesting attorney's fees under § 406(b), the statute does not contain a specific time limit and one is not clearly established by the courts. Some courts within the First Circuit have found that a § 406(b) petition for fees must be filed within 30 days of the receipt of the Social Security Administration's ("SSA") Notice of Award (hereinafter the "NOA"), which gives notice that there are past due benefits owed to the claimant and the amount of these benefits. See Weimer v. Comm'r, Soc. Sec., 13-cv-458, 2016 WL 1069948, at *1 (D. Me. Mar. 18, 2016), citing Reer v. Astrue, 08-cv-21, 2010 WL 2927255 (D. Me. Jul. 20, 2010). To that effect, the District of Maine, for example, has concluded that a fee motion "shall be filed within 30 days of the date of the Commissioner of Social Security's notice of award," pursuant to that District's Local Rule 54.2. Weimer v. Comm'r, Soc. Sec. Admin., No. 13-458, 2016 WL 1069948, at *1 (D. Me. Mar. 18, 2016).
In the District of Puerto Rico, however, at the time in which the plaintiff's counsel filed his fee petition, no similar Local Rule existed addressing the time to file a motion for fees for Social Security cases. See Rodríguez v. Saul, 542 F.Supp.3d 118 (D.P.R. 2021). By now, this, of course, has changed. The Local Rules of Procedure of this District were amended earlier this year to include a specific timeframe for counsel to request attorney's fees for Social Security cases both under the EAJA and § 406(b). More specifically, Local Rule 9(d)(2) states that: "A party seeking attorneys' fees pursuant to 42 U.S.C. § 406(b) shall have thirty (30) days after counsel's receipt of the original, amended, or corrected Notice of Award, or the Social Security Correspondence sent at the conclusion of the Agency's past-due benefit calculation, stating the amount withheld." The Court will not retroactively impose this deadline here.
The Local Rules of Procedure in the District of Puerto Rico were amended on February 28, 2022.
Other circuits have found that § 406(b) attorney fees should be filed within fourteen (14) days of plaintiff's receipt of the NOA. See Sinkler v. Berryhill, 932 F.3d 83, 87-89, 91 (2d Cir. 2019) (applying 14-day deadline (plus a three-day mailing period) pursuant to Federal Rule of Civil Procedure 54(d)(2)(B)); Walker v. Astrue, 593 F.3d 274 (3d Cir. 2010) (same minus three-day mailing period); Pierce v. Barnhart, 440 F. 3d 657, 663-64 (5th Cir. 2006) (same); Bergen v. Comm'r of Soc. Sec., 454 F.3d 1273, 1277 (11th Cir. 2006) (same). By contrast, the Tenth Circuit has held that a request "should be filed within a reasonable time of the Commissioner's decision awarding benefits." The Tenth Circuit, however, did not specify what constituted a "reasonable" timeframe. McGraw v. Barnhart, 450 F.3d 493, 505 (10th Cir. 2006).
Last year, this District Court entertained a fee petition under § 406(b) and denied it as untimely. See Dieppa-Velázquez v. Comm'r of Soc. Sec., Civ. No. 19-1574, 2021 WL 2144226 (D.P.R. May 25, 2021). In that case, while the Court did not ultimately decide which timeframe should apply, it nevertheless found that a fee petition filed five months after the receipt of the NOA was untimely. The Court wrote that "even giving Plaintiff's counsel the widest amount of time possible under Federal Rules of Civil Procedure 60(b)(6) and (c)(1), which establishes a deadline "within a reasonable time" after the decision to award benefits, the Court found that the request was "untimely and, thus, unreasonable." Dieppa-Velázquez, supra. The Court further concluded that plaintiff's counsel had not offered a reasonable explanation to justify waiting such an inordinate amount of time to file the fee petition under § 406(b).
Significantly, moreover, the Court also determined that the NOA is the triggering event for calculating the time from which the Court should begin to count the deadline to file a fee petition. Dieppa-Velázquez, supra. See also Herrera v. Berryhill, No. 14-1340-E, 2019 WL 157724, at *2 (C.D. Cal. Jan. 10, 2019) (the common practice in the district is to file a motion for § 406(b) fees after counsel has received a "Notice of Award"); Reer v. Astrue, No. 08-21-P-S, 2010 WL 2927255, at *1 (D. Me. July 20, 2010) (fee petition must be filed within 30 days of the date of the Commissioner of Social Security's "Notice of Award"); Garland v. Astrue, 492 F. Supp. 2d 216, 220 (E.D.N.Y. 2007) (holding that "the most logical event for calculating the moment from which the court should begin calculating the time for submitting a 406(b) application after an administrative award of benefits is the issuance of the Notice of Award ('NOA')").
The undersigned agrees with the reasoning espoused by the Court in Dieppa-Velázquez, supra, and adopts the conclusion found therein that the NOA (and not the "close out letter" or any other document sent by the agency), is the triggering event for the Court to begin counting the deadline for counsel to file a fee petition for Social Security cases. See Dieppa-Velázquez, supra ("The Court finds counsel's reliance on the 'closeout letter' to be misplaced and self-serving. The 'closeout letter' is simply a notice sent to counsel when he/she has not petitioned the agency for the fees under § 406(b). It serves as a reminder that those moneys are waiting to be distributed and urg[es] counsel to submit the fee petition if so desired or otherwise inform the agency. The 'closeout letter' has nothing to do with the award amount or its finality."). Id. See also González v. Comm'r of Soc. Sec., No. 18-cv-1714, 2021 WL 2173426 (D.P.R. May 26, 2021) (same); Nuñez Ramos v. Comm'r of Soc. Sec., No. 18-cv-1243, 2021 WL 2144218 (D.P.R. May 25, 2021) (same).
The Court further echoes Dieppa-Velázquez' reasoning that:
The [NOA] contains all the necessary information that counsel needs to file his petition for attorney's fees, to wit: the amount owed to Plaintiff, the amount withheld for attorney's fees, information about Medicare, and pertinent appeal information. The fact that the award amount may later be amended by the agency does not change the fact that the "Notice of Award" contains all the necessary information to be considered the triggering document for the fee petition.Dieppa-Velázquez, supra, Civ. No. 19-1574, 2021 WL 2144226 (D.P.R. May 25, 2021).
Other courts that have analyzed this matter have similarly found that the NOA is the triggering event for the fee petition. See e.g. Herrera v. Berryhill, No. 14-1340-E, 2019 WL 157724, at *2 (C.D. Cal. Jan. 10, 2019) (the common practice in the district is to file a motion for § 406(b) fees after counsel has received a NOA); Reer v. Astrue, No. 08-21-P-S, 2010 WL 2927255, at *1 (D. Me. July 20, 2010) (fee petition must be filed within 30 days of the date of the Commissioner of Social Security's NOA); Garland v. Astrue, 492 F. Supp. 2d 216, 220 (E.D.N.Y. 2007) (holding that "the most logical event for calculating the moment from which the court should begin calculating the time for submitting a 406(b) application after an administrative award of benefits is the issuance of the NOA); Cordice v. Astrue, No. 09-254, 2012 WL 243089 at *1 (D. Me. Jan. 24, 2012) (distinguishing between interim NOA and final NOA and holding that the time to file a fee petition is after a final NOA). Accordingly, the case law is clear that the triggering event for the countdown to begin for an attorney to file a petition for fees under § 406(b) is the issuance of the NOA by the SSA.
C. When fees are awarded under both the EAJA and the Social Security Act
A codified note to 28 U.S.C. § 2412 (Supp. 1993) states that where a claimant's attorney receives fees for the same work under both § 406(b) and the EAJA, "the claimant's attorney refunds to the claimant the amount for the smaller fee." Act of Aug. 5, 1985, Pub. L. 99-80, § 3, 99 Stat. 186. Thus, Congress harmonized fees payable by the Government under the EAJA with the fees payable under § 406(b) out of the claimant's past-due benefits in this manner: fee awards in Social Security cases may be made under both provisions, but the claimant's attorney must reimburse to the claimant the lesser award. See Gisbrecht, 535 U.S. at 796, 122 S.Ct. 1817; 28 U.S.C. § 2412.
III. Discussion
In the present case, the plaintiff's counsel maintains that his fee petition under § 406(b) was timely filed. He also claims that the fee amount requested is reasonable because it amounts to less than the 25 percent (25%) of the statutory cap allowed by law. Finally, counsel asserts that the EAJA fee previously awarded to him will be refunded to the plaintiff should the Court grant his petition under § 406(b). Although the Commissioner has no financial stake in this matter, it opposed the request for fees as untimely because it was filed more than ten (10) months after the issuance of the NOA by the agency and counsel provided no justification for his delayed petition. The Court's decision of whether to grant or deny the fee request at issue begins and ends with an inquiry into its timeliness.
In the pending motion for attorney's fees pursuant to the Social Security Act, counsel for the plaintiff claims that his fee petition is timely because the "NOA" was dated August 21, 2021, and his motion was filed on September 13, 2021, that is, within thirty (30) days from the issuance of the NOA. If, like counsel says, the NOA was in fact issued on August 21, 2021, the Court would agree that the petition would have been timely filed. But counsel's contention is inaccurate.
Here, the NOA was issued by the SSA on November 2, 2020, and not on August 21, 2021, like plaintiff's counsel mistakenly suggests. The Court conducted an independent review of the August 21, 2021, letter that counsel relies on to support his claim that the petition is timely. (See Docket No. 32-2). A plain review of the document makes pellucid that it is not the NOA, but, rather, a letter sent to the plaintiff by the agency notifying him that it had approved a fee of $3,000 to pay his representative for the work on his Social Security claim. Id. The letter also clarified that the agency had explained such fee and the plaintiff's right to question it in an earlier letter. Id. The letter further notified the plaintiff that the agency withheld $24,108.00 from his benefits to pay for the legal expenses in the event that his attorney requested that the court approve a fee for work conducted before the court. Id. The letter goes on to describe other details concerning a service charge that the agency collects from the attorney and other details about the service charge. Id. Even though the letter includes information on the amount withheld from benefits to pay a potential fee award for work conducted by counsel in this case, it is not the NOA. Counsel erroneously (and self-servingly) refers to such letter as the NOA. But it is not.
The Court looks to the NOA to determine whether a fee petition is timely filed. In this case, the NOA was issued by the agency on November 2, 2020, and it was sent directly to counsel Cruz-Sánchez (in addition to the plaintiff). (See Docket No. 36-1). The NOA contained all the necessary information that counsel needed in order to file his § 406(b) fee petition, namely, that the agency will pay past-due benefits to the plaintiff, the amount of past-due benefits owed to the plaintiff, information about attorney's fees paid for Social Security cases, and the amount of money withheld from plaintiff's past-due benefits to pay for Court-approved fees under the Social Security Act. Id. Because the NOA was issued by the agency on November 2, 2020, that is the date upon which the Court calculates the deadline for counsel to file a § 406(b) fee petition. The question now turns to what the deadline is for attorneys to request attorney's fees under the Social Security Act.
This Court has already determined that the issuance of the NOA by the agency is the event that triggers when courts should begin calculating the time for counsel to submit a § 406(b) petition for fees. See Dieppa-Velázquez, supra, Civ. No. 19-1574, 2021 WL 2144226 (D.P.R. May 25, 2021).
As noted above, the Social Security Act does not mention an express time limit under § 406(b)(1) in which to file a fee petition. Nonetheless, courts in this District have recently denied petitions for fees under § 406(b) as untimely because they were filed at varying times but all more than five (5) months after the issuance of the NOA. See Aragunde v. Commissioner of Social Security, Civ. No. 18-1892 (D.P.R. January 19, 2022) (J. Morgan) (denied as untimely when filed over five (5) months from the time the NOA was issued); Dieppa-Velázquez, Civ. No. 19-1574, 2021 WL 2144226 (D.P.R. May 25, 2021) (J. Vélez-Rivé) (fee petition under § 406(b) denied as untimely when filed five (5) months after the NOA was issued); González v. Comm'r of Soc. Sec., Civ. No. 18-1714, 2021 WL 2173426 (D.P.R. May 26, 2021) (fee petition pursuant to § 406(b) denied as untimely when filed ten (10) months after the NOA); Nuñez Ramos v. Comm'r of Soc. Sec., Civ. No. 18-1243, 2021 WL 2144218 (D.P.R. May 25, 2021) (fee petition under § 406(b) denied as untimely when filed almost one (1) year after the NOA). These cases are very illustrative.
In the present case, counsel Cruz-Sánchez filed his request for attorney fees under § 406(b) on September 13, 2021, that is, more than ten (10) months after the NOA was issued by the agency and sent directly to him. Looking at the significant dates in question, counsel's fee petition appears to be unreasonably late under any plausible timeframe. Further bolstering the Court's conclusion is the fact that this was not a redetermination case, but one that was remanded on consent by the Commissioner for the immediate award of benefits directly to the plaintiff. As such, counsel was on immediate notice since February 6, 2020, that benefits would be awarded to his client and that he was entitled to file a fee petition under § 406(b) for successful representation of the plaintiff in court. Counsel, however, did not move diligently to preserve his entitlement to fees under the Social Security Act, even though in most courts in this Circuit the timeframe to file such petitions is thirty (30) days from the issuance of the NOA and in some courts it is as few as fourteen (14) days. Significantly, moreover, counsel chose not to reply to the Commissioner's argument that the petition should be denied as untimely. As such, he has failed to explain to the Court why he waited such an inordinate amount of time (over ten (10) months) from the issuance of the NOA to file his fee petition under § 406(b). Counsel simply waited too long to file his request for fees and did not offer a legitimate explanation to justify such a belated filing.
Under these circumstances, the Court agrees with the above-cited decisions in this District that it need not decide what the applicable timeframe is to file a fee petition under § 406(b) in this case or which particular provision of the Federal Rules of Civil Procedure applies. Even giving plaintiff's counsel the broadest amount of time possible under Federal Rules of Civil Procedure 60(b)(6) and 60(c)(1), which set the deadline to file "within a reasonable time" after the decision to award benefits, the Court finds that counsel's petition is unreasonable and, therefore, untimely. See Aragunde, supra; Dieppa-Velázquez, supra; González, supra; Nuñez Ramos, supra.
In conclusion, absent extraordinary circumstances, or otherwise excusable conduct, none of which are present here, counsel's "Petition for authorization of an attorney fee pursuant to the Social Security Act" (Docket No. 32) is DENIED as untimely. See also Garland v. Astrue, 492 F. Supp. 2d 216, 220, 223 (E.D.N.Y. 2007) (holding that the attorney "simply waited too long to file his application and must therefore forfeit his entitlement to a fee"). Counsel is nevertheless entitled to keep the fees previously awarded to him under the EAJA.
IT IS SO ORDERED.