Opinion
14CV9461 (NSR)(LMS)
04-19-2019
VITTORIO PAPANDREA, Plaintiff, v. COMMISSIONER OF SOCIAL SECURITY, Defendant.
REPORT AND RECOMMENDATION
TO: THE HONORABLE NELSON S. ROMÁN, U.S.D.J.
Plaintiff, Vittorio Papandrea, has moved for an award of attorneys' fees pursuant to the Social Security Act, 42 U.S.C. § 406(b)(1). ECF No. 22. Defendant, the Commissioner of Social Security, has not opposed Plaintiff's application. For the reasons that follow, I respectfully report and recommend that Your Honor should grant Plaintiff's motion for attorneys' fees.
BACKGROUND
On January 25, 2010, Plaintiff filed applications for disability insurance benefits ("DIB") and supplemental security income ("SSI"), alleging a disability onset date of July 1, 2009, in both applications. ECF No. 9, Administrative Record ("AR") 227-35. Plaintiff's applications were denied on April 1, 2010 (AR 118-25), and he thereafter requested a hearing before an Administrative Law Judge ("ALJ") on May 20, 2010. AR 126-27. On June 16, 2011, a hearing was held before ALJ Roberto Lebron, resulting in an unfavorable decision dated September 19, 2011, finding Plaintiff not disabled. AR 94-109.
On October 11, 2011, Plaintiff requested that the Appeals Council review ALJ Lebron's decision. AR 172-73. On December 21, 2012, the Appeals Counsel remanded Plaintiff's case to the ALJ. AR 110-14. On April 9, 2013, a second administrative hearing was held before ALJ Lebron (AR 67-91), which resulted in another unfavorable decision dated June 24, 2013. AR 17-34. Thereafter, Plaintiff requested that the Appeals Council review ALJ Lebron's most recent decision. AR 14. The Appeals Council denied Plaintiff's request. AR 1-6. This denial made the ALJ's June 24, 2013, decision the final action of the Commissioner. See Lesterhuis v. Colvin, 805 F.3d 83, 87 (2d Cir. 2015) (per curiam) ("If the Appeals Council denies review of a case, the ALJ's decision, and not the Appeals Council's, is the final agency decision.").
On or about November 17, 2014, Plaintiff retained Olinsky Law Group ("OLG"). to represent him for "federal court review of [his] Social Security case." Pl's Aff. Ex. A, Fee Agreement (the "Agreement") ¶ 1. Specifically, the Agreement provided, inter alia, that
my federal court attorney also has the right to ask the court to award any remaining balance of 25% of my past-due benefits ("406(b) fees") for representing me in federal court. My federal court attorney has this right if the representative, who represents me during remand proceedings, does not collect the full 25% of my past due benefits during a remand proceeding; and also if (1) my case is remanded pursuant to sentence 6 of § 205(g) of the Social Security Act; or (2) my case is remanded pursuant to sentence 4 of § 205(g) of the Social Security Act and my federal court attorney is unable to collect the authorized EAJA award due to any unpaid federal debt that I may have a the conclusion of the federal case . . . I understand that if the court awards my federal court attorney a fee out of my past-due benefits and also awards an EAJA fee for the same work, my federal court attorney must refund the smaller fee to me.Pl's Aff. ¶ 3; Pl's Aff. Ex A ¶ 2. Upon entering into the Agreement, OLG sought to obtain social security benefits for Plaintiff at the federal court level.
Plaintiff's counsel submitted a "Ledger" detailing the work performed on Plaintiff's matter in federal court. Pl's Aff. Ex. C. Plaintiff's attorneys and paralegals expended a total of 15.95 hours between November 4, 2014, and September 29, 2015. Pl's Aff. ¶ 11; Pl's Aff. Ex. C. The undersigned also notes that Plaintiff erroneously refers to the Ledger appearing at Exhibit E. No such exhibit exists.
On November 27, 2014, Plaintiff, by and through his attorney, commenced the instant lawsuit pursuant to 42 U.S.C. § 405(g), seeking review of the final determination of the Commissioner denying his application for SSI benefits. Plaintiff's Affirmation ("Pl's Aff.") ¶ 1; ECF No. 2. On September 11, 2015, by way of a stipulation and order of remand, the case was remanded to the Social Security Administration ("SSA") for further administrative proceedings. Pl's Aff. ¶ 1; ECF No. 19. On September 14, 2015, judgment was entered remanding this matter to the Commissioner. ECF No. 20.
Thereafter, on October 20, 2015, the parties stipulated that pursuant to the Equal Access to Justice Act ("EAJA"), 28 U.S.C. § 2412, Defendant would pay Plaintiff $1,873.64 in attorneys' fees and expenses. ECF No. 21; Pl's Aff. ¶ 2.
Plaintiff contends that the total past-due benefits for Plaintiff are $51,955.00 based on calculations from the "Important Notice" letter. Pl's Aff. ¶ 4. The undersigned notes that while the letter does state the amount withheld in attorneys' fees, it does not state what the past-due award of benefits was. For purposes of deciding this motion, the undersigned accepts that $12,988.75 is in fact twenty-five percent of Plaintiff's past-due benefits. See Reyes v. Sec'y of Health & Human Servs., 807 F. Supp. 293, 296 (S.D.N.Y. 1992) (accepting the SSA's certification of withholding amount).
On December 26, 2018, Plaintiff's counsel received an "Important Notice" letter from the SSA stating that it was "withholding $12,988.75, which represent[ed] 25 percent of the past-due benefits for [Plaintiff], in anticipation of direct payment of authorized attorney[s'] fee[s]." Pl's Aff. Ex. B.
On January 7, 2019, Plaintiff filed the instant motion seeking an award of $6,988.75 in attorneys' fees, as contemplated by the Agreement. ECF Nos. 22, 23. In this motion, Plaintiff pledges to refund the EAJA attorneys' fees to Plaintiff should the Court grant his application for § 406(b) attorneys' fees. Pl's Aff. ¶ 9. Plaintiff also assumes that Plaintiff's "hearing representative received a [§] 406[(]a[)] fee in the amount of $6,000.00 for representation at the post litigation hearing and $6,988.75 is still available for 406[(]b[)] fees." Pl's Aff. ¶ 6. Plaintiff further states that "[a]gency Counsel should be able to confirm [the foregoing]." Pl's Aff. ¶ 6.
On March 25, 2019, the undersigned issued an Order requesting Defendant to file any opposition to the instant motion by April 8, 2019. ECF No. 24. As of the date of this report and recommendation, no such opposition has been received.
DISCUSSION
The Social Security Act provides that "[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, not in excess of 25 percent of the total past-due benefits to which the claimant is entitled by reason of such judgment . . . ." 42 U.S.C. § 406(b)(1)(A).
"In determining whether to award fees, a district court looks first to the contingent fee agreement between the parties." Curto v. Astrue, No. 07-CV-3711 (DLC), 2010 WL 1047624, at *2 (S.D.N.Y. Mar. 22, 2010); see Gisbrecht v. Barnhart, 535 U.S. 789, 807-08 (2002). If the fee agreement or retainer provides for a fee within the 25 percent cap, as it does here, "the attorney for the successful claimant must show that the fee sought is reasonable for the services rendered." Gisbrecht, 535 U.S. at 807; see Wells v. Sullivan, 907 F.2d 367, 371 (2d Cir. 1990) ("[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."). While "contingent fee agreements cannot simply be adopted as per se reasonable in all social security cases," courts recognize that "a contingency agreement is the freely negotiated expression both of a claimant's willingness to pay more than a particular hourly rate to secure effective representation, and of an attorney's willingness to take the case despite the risk of nonpayment." Wells, 907 F.2d at 371.
Factors considered by courts, in determining whether a contingency fee agreement seeks a reasonable fee, include whether: (1) " 'the contingency percentage is within the 25% cap,' as set by statute; (2) 'there has been fraud or overreaching in making the agreement'; and (3) 'the requested amount is so large as to be a windfall to the attorney.' " McCown v. Barnhart, No. 06-CV-3981 (DAB)(KNF), 2009 WL 996391, at *3 (S.D.N.Y. Mar. 31, 2009), report and recommendation adopted sub nom. McCown v. Astrue, No. 06-CV-3981 (DAB), 2009 WL 1447683 (S.D.N.Y. May 21, 2009) (quoting Wells, 907 F.2d at 372). Also relevant are the following: (1) "the character of the representation and the results the representative achieved"; (2) "the amount of time counsel spent on the case"; (3) whether "the attorney was responsible for any delay"; and (4) "the lawyer's normal hourly billing charge for noncontingent-fee cases." Gisbrecht, 535 U.S. at 808.
The undersigned first addresses the timeliness issue raised by Plaintiff. Plaintiff appears to anticipate opposition that his motion is untimely and contends that he has "good cause for failing to file the instant [m]otion within a reasonable time" and "urges the Court to find excusable neglect in this case." Pl's Aff. ¶¶ 7, 8. As Plaintiff recognized, the Second Circuit has not yet decided the question of whether an attorneys' fee application pursuant to § 406(b) must be filed within 14 days after the entry of judgment, as motions governed by Fed. R. Civ. P. 54(d)(2)(b) must be, or within a reasonable time period pursuant to Fed. R. Civ. P. 60(b)(6). See Tammy K. v. Comm'r of Soc. Sec., No. 15-CV-0871(GTS)(TWD), 2019 WL 1567523, at *2 (N.D.N.Y. Apr. 11, 2019). And, as Plaintiff noted, the case of Sinkler v. Berryhill, 305 F. Supp. 3d 448 (W.D.N.Y. 2018) is currently pending before the Second Circuit and may resolve this issue. See Sinkler v. Berryhill, Dkt. 18-2044 (2d Cir. July 12, 2018) (appeal pending). It therefore would not be equitable, under these circumstances, to hold Plaintiff to such a deadline, if it in fact a deadline is applicable.
Moreover, in this case, any alleged "delay" by Plaintiff's counsel in making the application was reasonable. Plaintiff's counsel received the letter from the SSA notifying him that the SSA was withholding $12,988.75 in attorneys' fees on January 4, 2019. Pl's Aff. ¶ 8. Three days later, Plaintiff's counsel made the instant application. Pl's Aff. ¶ 8. Plaintiff's counsel explained that because he had not represented Plaintiff at the administrative level, he had not received an Award Notice from the SSA. Plaintiff's counsel also noted that despite "routine follow-ups[,]" Plaintiff's representative had not notified him of a Notice of Award. Pl's Aff. ¶ 8. Accordingly, the undersigned respectfully recommends that Your Honor conclude that Plaintiff's motion be deemed timely.
The undersigned now analyzes the reasonableness of Plaintiff's attorneys' fees application. In the instant case, the Agreement between Plaintiff and Plaintiff's counsel provides for a twenty-five percent contingency fee, and thus, the contemplated fee does not exceed the statutory attorney-fee cap. See 42 U.S.C. § 406(b)(1)(A). Additionally, nothing in the record establishes a basis upon which to conclude that the Agreement was the product of "fraud or overreaching." Wells, 907 F.2d at 372. In assessing whether the attorneys' fees award would constitute a "windfall," the undersigned considered Plaintiff's counsel's affirmation wherein Plaintiff's counsel asserts that OLG expended 15.95 hours representing Plaintiff in the district court at "[t]he effective hourly rate [of] $320.70." Pl's Aff. ¶ 11. The Court finds this rate to be reasonable. In considering the additional factors discussed in Gisbrecht, the Court finds that the record is void of any indication that Plaintiff's counsel's representation of Plaintiff was anything but reasonable and appropriate. Plaintiff's counsel achieved a favorable result for Plaintiff. Additionally, the Court finds no unreasonable delay by Plaintiff's counsel in prosecuting this matter.
Plaintiff arrives at the hourly rate of $320.70 by first subtracting the EAJA fee award ($1,873.64) from the potential § 406(b) award ($6,988.75), resulting in an award of attorneys' fees of $5,115.11. That sum is then divided by the total hours expended (15.95 hours), to arrive at the hourly rate of $320.70.
CONCLUSION
In light of the foregoing, I conclude, and respectfully recommend that Your Honor should conclude, that Plaintiff's counsel is entitled to recover $6,988.75, representing twenty-five (25%) of the past-due benefits awarded to Plaintiff. I further report, and respectfully recommend that Your Honor should conclude, that the attorneys' fees previously awarded to Plaintiff in the amount of $1,873.64 under the EAJA be directly refunded to Plaintiff upon Plaintiff's counsel's receipt of funds awarded under 42 U.S.C. § 406(b).
NOTICE
Pursuant to 28 U.S.C. § 636(b)(1), as amended, and Fed. R. Civ. P. 72(b), the parties shall have fourteen (14) days, plus an additional three (3) days, pursuant to Fed. R. Civ. P. 6(d), or a total of seventeen (17) days, see Fed. R. Civ. P. 6(a), from the date hereof, to file written objections to this Report and Recommendation. Such objections, if any, shall be filed with the Clerk of the Court, with extra copies delivered to the chambers of the Honorable Nelson S. Román, at the United States District Court, Southern District of New York, 300 Quarropas Street, White Plains, New York, 10601, and to the chambers of the undersigned at the same address.
Failure to file timely objections to this Report and Recommendation will preclude later appellate review of any order of judgment that will be entered.
Requests for extensions of time to file objections must be made to Judge Román. Dated: April 19, 2019
White Plains, New York
Respectfully submitted,
/s/_________
Lisa Margaret Smith
United States Magistrate Judge
Southern District of New York