Opinion
21-CV-5453 (LJL) (JLC)
11-21-2023
ANTHONY FABIANI, Plaintiff, v. KILOLO KIJAKAZI,[1] Acting Commissioner, Social Security Administration, Defendant.
Honorable Lewis L. Liman, United States District Judge.
REPORT & RECOMMENDATION
JAMES L. COTT United States Magistrate Judge.
Following a stipulated remand and the subsequent award of benefits, plaintiff Anthony Fabiani has now moved for approval of attorney's fees pursuant to 42 U.S.C. § 406(b) in this social security case. For the reasons set forth below, I recommend that the motion be granted.
I. BACKGROUND
A. Facts & Procedural History
On October 10, 2016, Fabiani filed an application for social security benefits. Dkt. No. 8 at 26. The Social Security Administration (“SSA”) denied his claim, and Fabiani requested a hearing before an Administrative Law Judge (“ALJ”). Id. On June 7, 2019, following a hearing at which Fabiani was represented by different counsel, the ALJ also denied his claims. Id. at 36. Fabiani appealed the decision and the Appeals Council denied Fabiani's appeal on January 26, 2021. Id. at 11. On June 11, 2021, he retained Anselmo A. Algeria (“Algeria”) as his counsel. Declaration of Anselmo A. Algeria dated October 2, 2023 (“Algeria Decl.”) & Exhibit (“Ex.”) 2, Dkt. Nos. 20 & 20-2. On June 22, 2021, Fabiani filed a complaint in federal court. Dkt. No. 1.
For all citations to the Administrative Record, the page number refers to the automatic numbering created by the Electronic Case Filing system.
On December 3, 2021, Fabiani moved for judgment on the pleadings and filed a memorandum of law in support. Dkt. Nos. 9-10. On February 14, 2022, the parties agreed to remand the case for further proceedings. Dkt. No. 13. On February 15, 2022, the Court entered a stipulation and order remanding the case, a judgment was entered in favor of Fabiani, and the case was remanded to the SSA. Dkt. Nos. 14-15. On March 25, 2022, the parties stipulated that the SSA would pay $7,500.00 in attorney's fees under the Equal Access to Justice Act (“EAJA”), 28 U.S.C. § 2412. Dkt. No. 17. Algeria received these fees on May 1, 2022. Algeria Decl. ¶ 13.
Upon remand, Fabiani appeared again before an ALJ and on August 30, 2023, the ALJ found Fabiani to be disabled. Algeria Decl. ¶ 4. As part of his retainer agreement, Fabiani agreed to pay 25 percent of the past due benefits payable to him as payment to Algeria for legal services. Id. ¶ 6; see also Algeria Decl. Ex. 2.
By Notice of Award dated September 23, 2023, the SSA informed Fabiani that he was entitled to past due benefits of $205,028.00. Algeria Decl. ¶ 5 & Ex. 1, Dkt. Nos. 20 & 20-1. In the Notice of Award, the SSA also stated that it had withheld $51,257 (or 25% of the past due benefits) “to pay [Fabiani's] representative.” Algeria Decl. Ex. 1 at 3.
On October 2, 2023, less than 14 days after receiving notice of his benefits award, Fabiani timely filed this motion for attorney's fees pursuant to 42 U.S.C. § 406(b). Dkt. No. 18. In his motion papers, Fabiani seeks a court order approving an attorney's fees award of $51,257.00 for 35.3 attorney hours of work performed. Memorandum of Law in Support of Application for Attorney's Fees Pursuant to 42 U.S.C. Section 406(b)(1) (“Pl. Mem.”) at 3, Dkt. No. 19; Algeria Decl. ¶ 23. On October 16, 2023, the Acting Commissioner (“Commissioner”) filed a response to Fabiani's motion in her limited role “resembling that of a trustee for the claimant[],” and neither supported nor opposed the request for fees. Commissioner's Response to Plaintiff's Motion For Attorney's Fees Under 42 U.S.C. § 406(b) (“Comm'r Resp.”) at 1, Dkt. No. 22 (citing Gisbrecht v. Barnhart, 535 U.S. 789, 798 n.6 (2002)). The Commissioner did request, however, that the Court not direct her to “pay” the award; instead, she argues that the Court should only authorize an award. Comm'r Resp. at 2-3. Fabiani submitted his reply brief on October 18, 2023 (“Pl. Reply”).
Motions for attorney's fees under Section 406(b) are “subject to the fourteen-day filing limitation of Rule 54(d)(2)(B) [of the Federal Rules of Civil Procedure] once a party receives notice of a benefits calculation following a sentence four remand judgment.” Sinkler v. Berryhill, 932 F.3d 83, 89 (2d Cir. 2019).
II. DISCUSSION
A. Legal Standards
Pursuant to Section 206(b) of the Social Security Act, “[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). Even if the claimant agreed to a contingency fee arrangement, Section “406(b) calls for court review of such arrangements as an independent check.” Gisbrecht, 535 U.S. at 807. To do so, courts must first determine whether “the contingency percentage is within the 25% cap . . . [and] whether there has been fraud or overreaching in making the agreement.” Dorta v. Saul, No. 18-CV-396 (JLC), 2021 WL 776446, at *1 (S.D.N.Y. Mar. 1, 2021) (quoting Wells v. Sullivan, 907 F.2d 367, 372 (2d Cir. 1990)).
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 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.Nieves v. Colvin, No. 13-CV-1439 (WHP) (GWG), 2017 WL 6596613, at *1 (S.D.N.Y. Dec. 26, 2017) (quoting Gisbrecht, 535 U.S. at 808), adopted by 2018 WL 565720 (Jan. 24, 2018); see also Wells, 907 F.2d at 371 (“best indicator of the ‘reasonableness' of a contingency fee in a social security case is the contingency percentage actually negotiated between the attorney and client”). With respect to the third factor-whether a requested fee would be a “windfall”- courts consider several factors, including:
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 finally 3) whether the case was handled efficiently due to the attorney's experience in handling social security cases.Dorta, 2021 WL 776446, at *2 (quoting Joslyn v. Barnhart, 389 F.Supp.2d 454, 456-57 (W.D.N.Y. 2005)).
An attorney may receive fee awards under both the EAJA and § 406(b), but where the attorney receives two fee awards for the same work, he must “refun[d] to the claimant the amount of the smaller fee.” Gisbrecht, 535 U.S. at 796 (citation omitted). Notably, § 406(b)'s 25 percent cap applies only to fees awarded for federal court work and not the aggregate amount of fees under both § 406(a) and (b). See Culbertson v. Berryhill, 139 S.Ct. 517, 522 (2019).
B. Analysis
1. Reasonableness
In this case, each of the reasonableness factors weighs in favor of approving the fee request. As a threshold matter, the requested fee is equal to the 25 percent negotiated in the contingency fee agreement between Fabiani and Algeria, and there is no evidence of “fraud or overreaching” in reaching the agreement. Wells, 907 F.2d at 372.
Regarding the quality of representation, Algeria reviewed the administrative record and his client's medical history, drafted a 25-page memorandum of law, negotiated a remand, represented Fabiani at a subsequent administrative hearing, and succeeded in securing a substantial award of past due benefits for Fabiani. See, e.g., Cruz v. Saul, No. 17-CV-3951 (GBD) (JLC), 2020 WL 3965345, at *2 (S.D.N.Y. Jul. 14, 2020) (attorney provided quality representation after reviewing record and securing remand resulting in award of past due benefits), adopted by 2020 WL 6491692 (Nov. 4, 2020). Moreover, there is nothing in the record to suggest that counsel unreasonably delayed the proceeding.
Neither would the requested fees amount to a “windfall,” as Algeria's efforts were “particularly successful” as he ultimately secured Fabiani $205,028.00 in past due benefits. See, e.g., Ward v. Kijakazi, No. 20-CV-5412 (PGG) (JLC), 2023 WL 329210, at 3 (S.D.N.Y. Jan. 20, 2023) (attorney's efforts were “particularly successful” when claimant received fully favorable decision from SAA and award of more than $71,000 of past-due benefits), adopted by 2023 WL 5321032 (Aug. 18, 2023); see generally, Fields v. Kijakazi, 24 F.4th 845, 855 (2d Cir. 2022) (same for six-figure award of past-due benefits); Cruz, 2020 WL 3965345, at *3 (same for $25,000 in past-due benefits secured for claimant).
Algeria's de facto hourly rate is $1,452.04 ($51,257/35.3 hours = $1,452.04). Algeria Decl. Ex. 3, Dkt. No. 20-3. While such a rate would not be permissible under the traditional “lodestar” analysis, the lodestar analysis does not apply. Gisbrecht, 535 U.S. at 799-808.4 The de facto hourly rate requested by Fabiani, while on the high side, is within the range of fees approved in this Circuit. See, e.g., Fields, 24 F.4th at 854 (awarding fees where effective rate was $1,556.98 per hour); Schiebel v. Colvin, No. 6:14-CV-739 (LEK) (TWD), 2016 WL 7338410, at *3 (N.D.N.Y. Dec. 19, 2016) (citing cases where hourly rates between $1,324.52 and $2,100 were not unreasonable); Kazanjian v. Astrue, 2011 WL 2847439, at *2 (E.D.N.Y. July 15, 2011) (awarding what amounted to a $2,100 hourly rate). Lastly, because contingency agreements like the one here present risks of nonpayment, “any reasonable fee award must take account of that risk.” Nieves, 2017 WL 6596613, at *2 (quoting Wells, 907 F.2d at 371).
The Second Circuit recently directed that in determining whether a requested fee award is a windfall, a district court must consider more than the lodestar calculation and de facto hourly rate. Fields, 24 F.4th at 854. Instead, a “[c]ourt's primary focus should be on the reasonableness of the contingency agreement in the context of the particular case[.]” Id. at 853 (quoting Wells, 907 F.2d at 371). “[E]ven a relatively high hourly rate may be perfectly reasonable, and not a windfall, in the context of any given case.” Id. at 854.
2. Return of the EAJA Award
With respect to the EAJA fee award, where a plaintiff's counsel received fees for the same work before a district court under the EAJA and § 406(b), counsel must refund to the plaintiff the amount of the smaller fee. See Gisbrecht, 535 U.S. at 796 (“Congress harmonized fees payable by the Government under EAJA with fees payable under § 406(b) out of the claimant's past-due Social Security benefits in this manner: Fee awards may be made under both prescriptions, but the claimant's attorney must refund to the claimant the amount of the smaller fee.” (internal quotations and citations omitted)). Accordingly, Algeria appropriately agrees to reimburse his client in the amount of his EAJA fees upon receipt of the fees requested here. Algeria Decl. ¶ 14.
3. Language of the Order
The Commissioner requests that if the Court awards Section 406(b) fees, the Court's order in this case granting the fees motion not include “language directing that the Commissioner ‘pay' the award.” Comm'r Resp. at 2. The Commissioner expresses concern that the Court might direct her to pay an amount greater than the portion of Fabiani's awarded moneys that she has withheld for that purpose. Id. at 3. Instead, the Commissioner requests that the Court simply award fees without any directive to pay and, if the Court does direct the SSA to pay the Section 406(b) fees, it “specifically indicate that any amount it authorizes in Section 406(b fees . . . be paid out of Plaintiff's past-due benefits in accordance with agency policy.” Id.
In the instant case, the Social Security Administration has withheld $51,257.00 of Fabiani's past due benefits to pay potential attorney's fees. Algeria Decl. Ex. 1, at 3. Algeria is seeking that exact amount in fees, Algeria Decl. ¶ 23, so the “unlikely event that the agency inadvertently did not withhold past due benefits” that concerned the Commissioner appears to have been avoided. Comm'r Response at 3 n.5. Accordingly, there appears to be no basis for the Court to grant the Commissioner's request, and she cites no authority in which a court has approved her proposed language.
III. CONCLUSION
For these reasons, counsel's request for an award should be granted, the SSA should be ordered to pay counsel $51,257.00 out of the amount that the SSA has withheld from Fabiani's past-due benefits, and counsel should be ordered to pay his client the $7,500 he received pursuant to the Equal Access to Justice Act upon receipt of the $51,257.00 in attorney's fees.
PROCEDURE FOR FILING OBJECTIONS
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 to file written objections. See also Fed.R.Civ.P. 6. Such objections, and any responses to such objections, shall be filed with the Clerk of Court, with courtesy copies delivered to the chambers of the Honorable Lewis L. Liman, United States Courthouse, 500 Pearl Street, New York, NY 10007. Any requests for an extension of time for filing objections must be directed to Judge Liman.
FAILURE TO FILE OBJECTIONS WITHIN FOURTEEN (14) DAYS WILL RESULT IN A WAIVER OF OBJECTIONS AND WILL PRECLUDE APPELLATE REVIEW. 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72. See Thomas v. Arn, 474 U.S. 140 (1985); Wagner & Wagner, LLP v. Atkinson, Haskins, Nellis, Brittingham, Gladd & Carwile, P.C., 596 F.3d 84, 92 (2d Cir. 2010).