Opinion
20 Civ. 5704 (KMK) (AEK)
05-02-2023
ANGEL LUIS OTERO, JR., Plaintiff, v. COMMISSIONER OF SOCIAL SECURITY, Defendant.
REPORT AND RECOMMENDATION
ANDREW E. KRAUSE, United States Magistrate Judge
TO: THE HONORABLE KENNETH M. KARAS, U.S.D.J.
Currently before the Court is Plaintiff Angel Louis Otero, Jr.'s motion for attorney's fees pursuant to 42 U.S.C. § 406(b). ECF No. 23. For the reasons set forth below, I respectfully recommend that Plaintiff's motion for attorney's fees be GRANTED.
BACKGROUND
Plaintiff filed applications for Social Security Disability benefits and Supplemental Security Income benefits on May 25, 2016, with a claimed disability onset date of October 27, 2015. ECF No. 25 (“Binder Aff.”) ¶ 1. The Social Security Administration (“SSA”) denied his claim for benefits, and Plaintiff appealed by requesting a hearing before an administrative law judge (“ALJ”). Id. On August 10, 2018, Plaintiff participated in a hearing before ALJ Brian W. Lemoine, who issued a decision on December 18, 2018 finding that Plaintiff was not entitled to benefits. Id. On May 27, 2020, the SSA Appeals Council denied Plaintiff's request for review of the ALJ's decision. Id.
Plaintiff filed his complaint in this action pro se on July 21, 2020, ECF No. 2, and the Commissioner electronically filed the certified administrative record on February 17, 2021, ECF No. 8. Thereafter, on March 16, 2021, Plaintiff retained Charles E. Binder, Esq. to litigate his claim in federal court. Binder Aff. ¶ 3 & Ex. A. Pursuant to the “retainer and assignment” agreement executed by Plaintiff and counsel, Plaintiff agreed to pay Mr. Binder up to 25 percent of any award of past-due benefits made after a remand from the United States District Court to the SSA for further administrative proceedings. Binder Aff. ¶ 3 & Ex. A ¶ 3.
Plaintiff filed his motion for judgment on the pleadings pursuant to Rule 12(c) of the Federal Rules of Civil Procedure on June 11, 2021. ECF Nos. 12, 13. On September 19, 2021, the parties submitted a proposed stipulation and order of remand, ECF No. 18, which was so ordered the following day, ECF No. 19. Judgment was entered on September 20, 2021. ECF No. 20. Pursuant to a second stipulation and order submitted by the parties and signed by the Court on October 19, 2021, Plaintiff was awarded attorney's fees pursuant to the Equal Access to Justice Act (“EAJA”), 28 U.S.C. § 2412, in the amount of $5,181.53. ECF No. 22.
Upon remand to the SSA, the Appeals Council issued an order requiring further administrative proceedings, and in a decision dated July 11, 2022, ALJ Lemoine determined that that Plaintiff was disabled as of October 27, 2015, and was therefore entitled to benefits. See Binder Aff. ¶ 6. The SSA issued a notice of award (“NOA”) to Plaintiff on February 20, 2023, setting forth the benefits he would be receiving. Id. ¶ 12 & Ex. C (NOA). The NOA indicated that the SSA withheld 25 percent of the past-due benefits-a total of $23,904.50-to pay fees to Plaintiff's lawyer. Binder Aff. ¶ 12; NOA at 3.
Mr. Binder filed the instant motion, which seeks $23,904.50 in attorney's fees, on March 8, 2023. ECF No. 23. Counsel acknowledges that if he is awarded $23,904.50 in fees pursuant to 42 U.S.C. § 406(b), then Plaintiff is entitled to a $5,181.53 refund for the EAJA fees that were previously awarded. See Binder Aff. ¶ 13.
On March 29, 2023, the Commissioner filed a response in her limited role “resembling that of a trustee for the claimant[ ].” ECF No. 26 (“Def.'s Ltr.”) at 1 (quoting Gisbrecht v. Barnhart, 535 U.S. 789, 798 n.6 (2002)). The Commissioner did not take a specific position with respect to the fee request, and instead “respectfully defer[red] to the Court to determine the reasonableness of the requested fee under these circumstances.” Id. at 3.
DISCUSSION
I. Legal Standard
“Three statutes authorize attorney's fees in social security actions. 42 U.S.C. § 406(a) compensates attorneys for their representation at the administrative level; 42 U.S.C. § 406(b) compensates attorneys for representation before federal courts; and the EAJA provides additional fees if the Commissioner's position was not ‘substantially justified.'” LaFrance v. Saul, No. 17-cv-4709 (CM) (SN), 2019 WL 4677041, at *1 (S.D.N.Y. Aug. 26, 2019) (citing Gisbrecht, 535 U.S. at 794-96), adopted by 2019 WL 4565074 (S.D.N.Y. Sept. 20, 2019). Pursuant to § 406(b), which is invoked here, “[w]henever a court renders a judgment favorable to a claimant . . . 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,” as long as the fee does not exceed “25 percent of the total of the past-due benefits to which the claimant is entitled.” 42 U.S.C. § 406(b)(1)(A).
II. Analysis
A. Timeliness
In Sinkler v. Berryhill, the Second Circuit concluded that the 14-day filing period for seeking attorney's fees set forth in Rule 54(d)(2)(B) of the Federal Rules of Civil Procedure applies to attorney's fee applications under 42 U.S.C. § 406(b); the filing period runs from the date on which the NOA is received, and the period may also be subject to equitable tolling. 932 F.3d 83, 85 (2d Cir. 2019). Here, Plaintiff's motion was filed on March 8, 2023, 16 days after the February 20, 2023 date on the NOA. Mr. Binder does not state specifically when he received the NOA, see Binder Aff. ¶ 12, but assuming that he received it three days after mailing-i.e., on February 23, 2023-this motion was filed 13 days after receipt, and therefore was timely filed. See Sinkler, 932 F.3d at 89 n.5 (“Nothing in this opinion departs from the law's presumption that a party receives communications three days after mailing.”); Obremski v. Acting Comm'r of Soc. Sec., No. 20-cv-3902 (JLC), 2023 WL 128733, at *1 n.1 (S.D.N.Y. Jan. 9, 2023) (deeming timely a motion for attorney's fees pursuant to 42 U.S.C. § 406(b) that was filed 17 days after the date of the NOA).
B. Reasonableness of the Fee Award
To ensure that contingency fees are employed fairly in Social Security cases, “Congress capped contingency fees at twenty-five percent of the claimant's past-due benefits and charged courts with ensuring that resulting fees are ‘reasonable.'” Fields v. Kijakazi, 24 F.4th 845, 849 (2d Cir. 2022). “‘[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.'” Id. at 852-53 (quoting Wells v. Sullivan, 907 F.2d 367, 371 (2d Cir. 1990)). “When conducting its analysis, the court's primary inquiry should be on the reasonableness of the contingency agreement in the context of the particular case and not merely to rubber stamp the contingent fee agreement.” Caraballo v. Comm'r of Soc. Sec., No. 17-cv-7205 (NSR) (LMS), 2021 WL 4949217, at *2 (S.D.N.Y. Oct. 22, 2021) (citing Wells, 907 F.2d at 371).
To assess the reasonableness of a contingency fee, a court must first “‘determine whether the contingency percentage is within the 25% cap' and . . . ‘whether there has been fraud or overreaching in making the agreement.'” Fields, 24 F.4th at 853 (quoting Wells, 907 F.2d at 372). A court must then consider the following factors to determine the reasonableness of a requested award: (1) whether the requested fee is out of line with the “character of the representation and the results the representative achieved,” (2) whether “the attorney is responsible for delay, lest the attorney profit from the accumulation of benefits during a delay that the attorney caused,” and (3) “if the benefits are large in comparison to the amount of time counsel spent on the case, the so-called windfall factor.” Id. (cleaned up).
Here, as the Commissioner notes, counsel's requested fee “is not greater than 25% of Plaintiff's past due benefits,” Def.'s Ltr. at 2, and further, there is no evidence or suggestion of fraud or overreaching applicable to counsel's attorney's fee request, see id.
The Court turns next to the reasonableness factors. First, the fee, comprising 25 percent of Plaintiff's past-due benefits award, see NOA at 3, is in accordance with the character of the representation and the results achieved. After bringing this action to challenge the denial of benefits, Mr. Binder was able to achieve a successful result for his client, as the Commissioner agreed to remand the case to the agency for further proceedings. See Binder Aff. ¶ 4; ECF No. 19. Back before the SSA, the ALJ found Plaintiff to be disabled and entitled to receive benefits. Binder Aff. ¶ 6; see, e.g., Shrack v. Saul, No. 16-cv-2064 (RMS), 2020 WL 373074, at *2 (D. Conn. Jan. 23, 2020) (finding that where “plaintiff sought and obtained a Sentence Four remand, and the plaintiff received a fully favorable result upon remand,” fee was in line with character of representation and results achieved).
Second, Plaintiff's counsel did not cause any unreasonable delay in this action. While the Court granted one modification of the briefing schedule prior to Plaintiff's filing of his moving brief, this adjustment was made to account for the fact that Mr. Binder had recently been retained in this matter and to provide a schedule whereby Plaintiff would file the opening brief, as opposed to the Commissioner filing the opening brief. See ECF No. 3 (Court's standing order in effect for this case, which required the Commissioner to file the opening brief in Social Security cases where plaintiff was proceeding pro se). This change to the briefing schedule was jointly requested by the parties and granted by the Court; it was not unreasonable in any way, nor is there any reason to believe that it was it designed to increase the size of Plaintiff's past-due benefits or attorney's fee.
Third, with respect to the so-called “windfall” factor, counsel's requested fee of $23,904.50 is not inappropriately large in light of the 23.7 hours that counsel devoted to the case and the successful result that was achieved. See Binder Aff. ¶¶ 8, 10 & Ex. B (time records). For purposes of evaluating the “windfall” factor, the Second Circuit has instructed courts to look beyond the de facto hourly rate and to assess: (1) the “ability and expertise” of the attorneys, (2) the “nature and length of the professional relationship with the claimant,” (3) the “satisfaction of the disabled claimant,” and (4) “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 854-55.
Here, Mr. Binder worked on this case with his colleague, Daniel S. Jones, Esq. See Binder Aff ¶¶ 8-11. Mr. Binder has worked for a number of years exclusively on Social Security disability cases, during which he has handled thousands of administrative hearings and federal appeals. See id. ¶ 11. Mr. Jones has practiced exclusively in the area of federal court appeals of Social Security disability claims for over a decade. See id. ¶ 9. Both attorneys have significant experience in the area of Social Security disability cases and possesses the requisite ability and expertise in this field. Counsel's work on this matter in federal court included evaluating the merits of Plaintiff's case, reviewing the 531-page administrative record, conducting medical research, and preparing motion papers which ultimately prompted the Commissioner to agree to remand the matter. See id. Ex. B; ECF No. 8 (administrative record). Courts within the Second Circuit generally and routinely endorse 20-40 hours for work performed by counsel in Social Security disability cases. See Bass v. Kijakazi, No. 16-cv-6721 (JCM), 2022 WL 1567700, at *4 (S.D.N.Y. May 18, 2022) (collecting cases). Here, counsel's 23.7 hours of work falls at the low end of this range, reflecting counsel's years of experience and efficiency. See Binder Aff Ex. B. Additionally, this Court has no reason to believe that Plaintiff is in any way dissatisfied with the results of counsel's representation. Indeed, Plaintiff was awarded $95,618 in past-due benefits, and was found eligible for $1,284.00 per month in benefits going forward. See NOA at 2, 3; Bass, 2022 WL 1567700, at *5 (finding that counsel's success in advocating on behalf of plaintiff “militate[s] in favor of approving” fee request). Moreover, “[l]awyers who operate on contingency-even the very best ones-lose a significant number of their cases and receive no compensation when they do”; accordingly, when operating with a contingency agreement like the one at issue here, “payment for an attorney in a social security case is inevitably uncertain, and any reasonable fee award must take account of that risk.” Fields, 24 F.4th at 855-56 (cleaned up). The award amount sought here appropriately reflects this risk.
Turning to the de facto rate-which is not dispositive, see id. at 854-counsel would effectively be compensated here at a rate of $1,008.63 per hour ($23,904.50 for 23.7 hours worked). This rate is well within the range of de facto hourly rates approved by courts within this Circuit, and is substantially less than the $1,556.98 de facto hourly rate approved by the Second Circuit in Fields. See id. at 854-57. Accordingly, the Court finds that Mr. Binder's requested fee award of $23,904.50 is reasonable.
CONCLUSION
For the reasons set forth above, I respectfully recommend that Plaintiff's motion for attorney's fees (ECF No. 23) be GRANTED, and that Mr. Binder be awarded $23,904.50. I further respectfully recommend that Mr. Binder be directed to promptly refund to Plaintiff $5,181.53, which represents the EAJA fees that counsel previously received, upon receipt of the award recommended by this Report and Recommendation.
NOTICE
Pursuant to 28 U.S.C. § 636(b)(1) and Rule 72(b) of the Federal Rules of Civil Procedure, the parties shall have fourteen (14) days from service of this Report and Recommendation to file written objections. See also Fed.R.Civ.P. 6(a). A party may respond to another party's objections within fourteen (14) days after being served with a copy. Fed.R.Civ.P. 72(b)(2). Such objections, and any responses to such objections, shall be filed with the Clerk of the Court, with courtesy copies delivered to the chambers of the Honorable Kenneth M. Karas, United States District Court, Southern District of New York, 300 Quarropas Street, White Plains, New York, 10601, and to the chambers of the Honorable Andrew E. Krause at the same address.
Any request for an extension of time for filing objections or responses to objections must be directed to Judge Karas, and not to the undersigned.
Failure to file timely objections to this Report and Recommendation will result in a waiver of objections and will preclude appellate review. See Thomas v. Arn, 474 U.S. 140 (1985); Smith v. Campbell, 782 F.3d 93, 102 (2d Cir. 2015).