Opinion
06 Civ. 3981 (DAB) (KNF).
March 31, 2009
REPORT AND RECOMMENDATION
I. INTRODUCTION
Roy L. McCown ("McCown"), brought this action pursuant to the Social Security Act, 42 U.S.C. §§ 301- 1397jj, as amended, to obtain judicial review of the final decision of the Commissioner of Social Security ("the Commissioner"). Before the Court is a request by McCown's attorney, Christopher James Bowes, Esq. ("Bowes"), for attorney's fees pursuant to 42 U.S.C. § 406(b). The application is addressed below.
II. BACKGROUND
In October 2005, McCown, through counsel, appeared before an administrative law judge ("ALJ") for a hearing on his application for social security benefits. The ALJ denied benefits to McCown, and, in November 2005, the Appeals Council declined to review that determination. Thereafter, McCown retained new counsel, Bowes, by entering into a contingency-fee agreement. The retainer agreement provided, inter alia, that McCown: agreed to pay Bowes "a sum equivalent to one-quarter (i.e., 25%) of all past due benefits as compensation for his legal services."
In November 2006, a scheduling order was issued, which provided, inter alia, that any dispositive motion was to be served and filed on or before December 20, 2006. The plaintiff requested several extensions of this deadline, in order to obtain a July 2006 psychological report on McCown that was utilized in a separate social security proceeding, which resulted in a favorable ruling for McCown. In seeking these extensions, Bowes explained that: (1) in December 2006, he requested a copy of a neuropsychological test report ("NTR") administered to McCown by the Social Security Administration ("SSA"); (2) in January 2007, Bowes continued his efforts in obtaining a copy of the NTR; (3) in January 2007, SSA located McCown's file, but had not yet submitted a copy of the NTR to Bowes; (4) in February 2007, SSA, which was the only source from which a copy of the NTR could be obtained, was having difficulty locating one of McCown's folders, and that further delay was necessary in light of the "importan[ce] [of the NTR] to the present case because . . . it documents the severity of Mr. McCown's cognitive problems from his car accident"; and (5) in March 2007, he received a copy of the NTR and requested a 30-day extension to provide SSA an opportunity to review the plaintiff's request for a voluntary remand. All of the plaintiff's extension requests were granted.
In June 2007, with the parties' consent, the matter was remanded to the Commissioner for further proceedings, pursuant to 42 U.S.C. § 405(g). In May 2008, Bowes filed, in this court, an application for attorney's fees, pursuant to 42 U.S.C. § 406(b). In August 2008, the undersigned recommended that Bowes' application be denied, without prejudice, as it was premature because the Commissioner had not yet filed, with the court, additional or modified findings of fact and a decision following remand, as required by 42 U.S.C. § 405(g). The Commissioner was directed to file her additional and modified findings of fact and decision expeditiously.
In December 2008, the Commissioner submitted a "notice of decision," to the Court which states the Commissioner reached a decision "fully favorable" to McCown. Specifically, the Commissioner found that McCown "has been under a disability, as defined in the Social Security Act, from January 30, 2003." The Commissioner made various findings of fact in support of the determination that McCown was disabled, and, in doing so, relied upon "newly obtained documentary evidence in the record," including a July 2006 evaluation of McCown. In a letter attached to the notice of decision, the Commissioner explained that, in processing McCown's disability benefits award, McCown was owed, before any deductions, $42,484.00, which represents the benefit amount due from July 2003 through April 2008. The Commissioner noted that:
[w]e then deducted $10,600.00 for the attorney fee, which represented 25% of the past due benefits of $42,400.00. For purposes of the attorney fee withholding, past due benefits are computed through the month the claim is finally approved for payment, which in this case was March 2008. In addition, we deducted $9,800.00 as the offset amount for your having received Supplemental Security Income (SSI).
In February 2009, Bowes submitted a letter to the court requesting that he be granted permission to "re-file his motion for approval of the contingent fee agreement pursuant to 42 U.S.C. section 406(b) following the entry of the Order closing this case." In a declaration filed by Bowes, in support of his motion for attorney's fees, he noted he expended "19.8 hours of attorney time in Court alone and an additional 11.4 [administrative] hours on remand." Bowes stated he provided the "highest quality" representation to McCown, and secured disability benefits for McCown on remand. Attached to his declaration are Bowes' "time records," which provide a detailed account of the time spent in preparing for, and representing McCown in, this civil action. The Commissioner does not oppose Bowes' application.
III. DISCUSSION
Pursuant to 42 U.S.C. § 405(g), if a court remands a case to the Commissioner for further proceedings regarding social security benefits, the court retains jurisdiction over the action pending the Commissioner's filing of her decision with the court.See Sullivan v. Hudson, 490 U.S. 877, 886, 109 S. Ct. 2248, 2255 (1989). Following a remand that results in a "decision fully favorable to the individual," 42 U.S.C. § 405(g), the Commissioner "must return to the district court to 'file with the court any such additional or modified findings of fact and decision.'" Melkonyan v. Sullivan, 501 U.S. 89, 98, 111 S. Ct. 2157, 2163 (1991) (quoting 42 U.S.C. § 405(g)). In the case at bar, the Commissioner's March 2008 decision was fully favorable to McCown, and the Commissioner complied with § 405(g), as a copy of the Commissioner's additional or modified findings of fact and decision have been provided to the Court.
"Whenever 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). "[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). 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." Id. at 370-71. 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." Id. at 372. "Courts . . . have appropriately reduced the attorney's recovery" based upon: (1) "the character of the representation and the results the representative achieved"; (2) whether the attorney created a delay in proceedings, since an attorney should "not profit from the accumulation of benefits during the pendency of the case in court" caused by such delay; and (3) whether the proposed attorney's fee is "large in comparison to the amount of time counsel spent on the case." Gisbrecht v. Barnhart, 535 U.S. 789, 808, 122 S. Ct. 1817, 1828 (2002).
In the instant case, the retainer agreement between McCown and Bowes provides for a 25% 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 provides a basis upon which to conclude that the retainer agreement was the product of "fraud or overreaching." Wells, 907 F.2d at 372. In determining whether the contingency fee amount would constitute a "windfall," the Court considered Bowes' declaration submitted in support of the motion for attorney fees, in which Bowes states he expended 19.8 hours representing McCown in the district court, see Gisbrecht, 535 U.S. at 794, 122 S. Ct. 1821 (noting that § 406(b) "controls fees for representation in [federal] court," not in administrative proceedings), which, under a lodestar analysis, would constitute an hourly rate of $536. Although this hourly rate may be "well above what would be awarded under the lodestar method based on market rates. . . . [t]he Court's use of such a rate here is justified by the deference that must be given to the contingency fee agreement." George v. Astrue, No. 04-cv-1545, 2009 WL 197054, at *2, 2009 U.S. Dist. LEXIS 6016, at *7 (E.D.N.Y. Jan. 28, 2009) (finding $542.92 to be a reasonable hourly rate in a SSA action);see also Blizzard v. Astrue, 496 F. Supp. 2d 320, 323-24 (S.D.N.Y. 2007) (finding $705 to be a reasonable hourly rate in a SSA action).
In Blizzard, the court noted that in Ellick v. Barnhart, 445 F. Supp. 2d 1166 (C.D. Cal. 2006), the court conducted an "exhaustive" analysis of post-Gisbrecht cases to learn howGisbrecht was being applied nationally. Blizzard, 496 F. Supp. 2d at 324. The Ellick decision reveals that "the net hourly rates approved (even if the court did not actually perform the calculation) ranged from $20.31 per hour to $982 per hour," and that "attorneys were being compensated at anywhere from 1.01 to 6.55 times their normal billing rate." Id. (citing Ellick v. Barnhart, 445 F. Supp. 2d at 1169-71, 1173).
In considering the additional factors discussed in Gisbrecht, the Court finds nothing in the record indicates that the character of Bowes' representation was anything but reasonable and appropriate; moreover, he achieved a "fully favorable" result for McCown. The Court has also considered the delay that occurred in prosecuting this action. Although Bowes requested several extensions of time, in order to obtain the NTR, these requests discussed his attempts at obtaining the NTR, its significance to this case, and the additional actions that would be taken by the plaintiff to obtain the NTR. Further, the Commissioner's factual findings in support of her decision, highlight her reliance upon "newly obtained documentary evidence," including a report generated in July 2006, which is the date of the NTR report. Therefore, the delay in the proceedings, from December 20, 2006, through April 2007, appears to be the result of a legitimate effort at obtaining a key document from SSA, and not an attempt by counsel to extend the proceedings to increase the contingency fee he might recover, should the plaintiff's challenge to the Commissioner's decision prove to be successful.See Gisbrecht, 535 U.S. at 808, 122 S. Ct. at 1828 (stating that, "[i]f the attorney is responsible for delay, . . . a reduction is in order so that the attorney will not profit from the accumulation of benefits during the pendency of the case").
IV. RECOMMENDATION
For the reasons set forth above, I recommend that: (1) Bowes' application for attorney's fees, pursuant to 42 U.S.C. § 405(g), Docket Entry No. 17, be granted in the amount of $10,600; and (2) Bowes' letter-request, that he be granted permission to "re-file" his motion for attorney's fees, be denied, as moot.
V. FILING OF OBJECTIONS TO THIS REPORT AND RECOMMENDATION
Pursuant to 28 U.S.C. § 636(b)(1) and Rule 72(b) of the Federal Rules of Civil Procedure, the parties shall have ten (10) days from service of this Report to file written objections. See also, Fed.R.Civ.P. 6. Such objections, and any responses to objections, shall be filed with the Clerk of Court, with courtesy copies delivered to the chambers of the Honorable Deborah A. Batts, 500 Pearl Street, Room 2510, New York, New York, 10007, and to the chambers of the undersigned, 40 Centre Street, Room 540, New York, New York, 10007. Any requests for an extension of time for filing objections must be directed to Judge Batts. FAILURE TO FILE OBJECTIONS WITHIN TEN (10) DAYS WILL RESULT IN A WAIVER OF OBJECTIONS AND WILL PRECLUDE APPELLATE REVIEW. See Thomas v. Arn, 474 U.S. 140 (1985); IUE AFL-CIO Pension Fund v. Herrmann, 9 F.3d 1049, 1054 (2d Cir. 1993); Frank v. Johnson, 968 F.2d 298, 300 (2d Cir. 1992); Wesolek v. Canadair Ltd., 838 F.2d 55, 57-59 (2d Cir. 1988); McCarthy v. Manson, 714 F.2d 234, 237-38 (2d Cir. 1983).