Opinion
Civil Action 21 Civ. 10370 (LGS) (SLC)
11-17-2023
CONOR MCENEANEY, Plaintiff, v. COMMISSIONER OF SOCIAL SECURITY, Defendant.
TO THE HONORABLE LORNA G. SCHOFIELD, United States District Judge:
REPORT AND RECOMMENDATION
SARAH L. CAVE, United States Magistrate Judge.
I. INTRODUCTION
Before the Court is the motion of Robert C. Buckley (“Buckley”), counsel for Plaintiff Conor McEneany (“Plaintiff”), pursuant to 42 U.S.C. § 406(b) (“Section 406(b)”) seeking an award of attorneys' fees of $35,447.82 for work performed to secure Supplemental Security Income (“SSI”) benefits for Plaintiff. (ECF Nos. 19; 20; 25 (together, the “Motion”). For the reasons set forth below, I respectfully recommend that the Motion be GRANTED IN PART and DENIED IN PART, and that Buckley be awarded $35,400.00 in attorneys' fees under Section 406(b) and be ordered to refund to Plaintiff $4,091.68 in previously awarded attorneys' fees.
II. BACKGROUND
Buckley represented Plaintiff in this action for judicial review of the April 16, 2020 decision of Defendant Commissioner of Social Security (the “Commissioner”) denying SSI to Plaintiff. (ECF Nos. 1 ¶ 1; 20-1 at 1 (the “Agreement”) (“[T]he scope of my legal representation will be limited to . . . appealing an April 16th, 2020 denial of your claim for [SSI] benefits by filing a lawsuit in the U.S. Federal District Court in the Southern District of New York.”)). Buckley represented Plaintiff pursuant to a contingency fee agreement that provided for Buckley to receive (i) a retainer fee of $6,000.00 (the “Retainer”), plus (ii) 25% of any past due benefits awarded to Plaintiff. (ECF No. 20-1 at 1-2). On June 1, 2022-after the administrative record had been filed (ECF No. 11)-but before Plaintiff had filed any motion for judgment on the pleadings-the parties stipulated to remand the action to the Commissioner for further proceedings pursuant to Sentence 4 of 42 U.S.C. § 405(g). (ECF No. 13). On June 30, 2022, the parties stipulated and agreed to an award to Plaintiff of attorneys' fees and costs in the amount of $4,091.68, pursuant to the Equal Access to Justice Act, 28 U.S.C. § 2412 (“EAJA”). (ECF No. 18 (the “EAJA Fees”)).
Following remand, the Social Security Administration (“SSA”) conducted further proceedings and found that Plaintiff was disabled and entitled to benefits. In a letter dated March 25, 2023, the SSA notified Plaintiff that the SSA calculated his past due benefits as $138,723.50, from which the SSA was withholding $45,539.50 to pay a possible attorneys' fees request under Section 406(b). (ECF No. 20-2 (the “Award Letter”)).
On March 27, 2023, Plaintiff filed an initial motion, and the next day, filed the Motion, as amended, both of which requested attorneys' fees under Section 406(b) in the amount of $41,447.82, which was the amount that the SSA had withheld less the EAJA Fees (the “Initial Requested Fees”)).(ECF Nos. 19; 20). Buckley noted that he had represented Plaintiff before the SSA, but the Initial Requested Fees represented only fees incurred in this action. (ECF No. 20 ¶ 8).
$45,539.50 - $4,091.68.
On April 24, 2023, the Commissioner filed a response, deferring to the Court's determination of the timeliness of the Motion and reasonableness of the Initial Requested Fees. (ECF No. 24 (the “Response”)). In the Response, the Commissioner noted, inter alia, that the Initial Requested Fees appeared not to reflect a reduction for Buckley's receipt of the Retainer at the outset of the representation. (ECF No. 24 at 5-6). On October 5, 2023, Buckley filed a reply affirmation (the “Reply”), in which he acknowledged receiving the $6,000.00 Retainer, such that, with the EAJA Fees ($4,091.68), he had already received $10,091.68 in fees, and accordingly, reduced the requested fee amount to $35,447.82 (the “Revised Requested Fees”)). (ECF No. 25 ¶¶ 1, 6, 8, 11).Buckley attests that he expended 23.6 hours on this action, comprised of research, review of the administrative record, legal research, preliminary motion drafting, negotiation of the remand stipulation, and preparation of fee requests. (ECF Nos. 20 ¶ 7; 20-3).
In the Reply, Buckley states that he seeks fees in the amount of $35,447.32. (ECF No. 25 ¶ 8). The Court notes, however, that $45,539.50 (i.e., 25% of the past due benefits) less $10,091.68 (i.e., the fees Buckley already received) is $35,447.82.
III. DISCUSSION
A. Legal Standard
Section 406(b) of the Social Security Act provides that a court may award a “reasonable fee . . . not in excess of 25% of the total of the past-due benefits to which the claimant is entitled.” 42 U.S.C. § 406(b). If the contingency percentage is within the 25% cap, and there is no evidence of fraud or overreaching in making the agreement, a district court should test the agreement for reasonableness. See Fields v. Kijakazi, 24 F.4th 845, 853 (2d Cir. 2022).
Internal case citations and quotation marks are omitted unless otherwise indicated.
To determine whether a requested fee is reasonable, a district court should consider “(a) the character of the representation and the results the representative achieved,” (b) whether counsel was responsible for a delay that unjustly allowed counsel to obtain a percentage of additional past-due benefits, and (c) whether the requested amount is so large in comparison to the time that counsel spent on the case “as to be a windfall to the attorney.” Fields, 24 F.4th at 849 n.2, 853. To analyze the third factor, i.e., whether the fee would constitute a “windfall,” the Second Circuit recently instructed courts to “consider more than the de facto hourly rate” because “even a relatively high hourly rate may be perfectly reasonable, and not a windfall, in the context of any given case.” Id. at 854. Courts should now consider: (1) “the ability and expertise of the lawyers and whether they were particularly efficient, accomplishing in a relatively short amount of time what less specialized or less well-trained lawyers might take far longer to do,” (2) “the nature and length of the professional relationship with the claimant- including any representation at the agency level,” (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.” Id. at 854-55. The Second Circuit warned that “the windfall factor does not constitute a way of reintroducing the lodestar method[,]” and, in doing so, “indicate[d] the limits of the windfall factor.” Id. at 854. A district court may reduce the amount provided for in a contingency fee agreement “only when [the court] finds the amount to be unreasonable” after considering all of these factors. Id. at 852-53; see Munoz v. Comm'r of Soc. Sec., No. 20 Civ. 2496 (KAM), 2023 WL 5310742, at *1 (E.D.N.Y. Aug. 17, 2023) (summarizing Fields factors); Hill v. Comm'r of Soc. Sec., No. 20 Civ. 3821 (PKC), 2023 WL 4827265, at *2 (E.D.N.Y. July 27, 2023) (same); Kearney v. Saul, No. 20 Civ. 5439 (JMF) (KHP), 2023 WL 4665126, at *2-3 (S.D.N.Y. July 5, 2023) (applying Fields analysis).
In addition, if a court awards fees to a claimant's attorney under both the EAJA and Section 406(b), the attorney must refund to the claimant the amount of the smaller fee. See Gisbrecht v. Barnhart, 535 U.S. 789, 796 (2002); Wells v. Brown, 855 F.2d 37, 48 (2d Cir. 1988) (“Once appropriate fees under 42 U.S.C. § 406(b) are calculated, the district court should order [the attorney] to return the lesser or either that amount or the EAJA award to his clients.”); Hill, 2023 WL 4827265, at *3 (collecting cases).
B. Application
1. Timeliness
The Court finds, and the Commissioner does not dispute, that the Motion, which Buckley filed two days after the Award Letter, was timely. (ECF No. 24 at 2). See Sinkler v. Berryhill, 932 F.3d 83, 85 (2d Cir. 2019) (holding that 14-day filing period for seeking attorneys' fees in Fed.R.Civ.P. 54(d)(2)(B) applies to Section 406(b) applications and runs from counsel's of receipt of award notice); accord Johnson v. Kijakazi, No. 20 Civ. 2630 (BCM), 2022 WL 17718336, at *5 (S.D.N.Y. Dec. 15, 2022).
2. Reasonableness
As an initial matter, the Court notes that Buckley requests a “net” fee award, as he has deduced from the Revised Requested Fees the amount he received for the EAJA Award. (ECF No. 25 ¶ 8). This “netting” approach, however, is “disfavored” because it contradicts “controlling authority and well-established precedent” requiring the claimant's attorney-not the Commissioner-to refund to the claimant an EAJA fee award where fees are subsequently awarded under Section 406(b). Johnson v. Kijakazi, No. 20 Civ. 630 (BCM), 2022 WL 17718336, at *6 (S.D.N.Y. Dec. 15, 2022) (noting that netting “ignores the express statutory directive that, ‘where the claimant's attorney receives fees for the same work under both [§ 406(b)] and [EAJA], the claimant's attorney refunds to the claimant the amount of the smaller fee.'”) (quoting Pub. L. No. 99-80, § 3, 99 Stat. 186)). Accordingly, in analyzing the reasonableness of the Revised Requested Fees, the Court does not take the amount of the EAJA Award into consideration. Id.
In this action, Plaintiff retained Buckley pursuant to the Agreement, which entitles Buckley to receive in feed up to 25% of Plaintiff's past-due benefits. (ECF No. 20-1 at 2-3). The Revised Requested Fees do not exceed the statutory cap in Section 406(b), and there are no allegations of fraud or overreaching with respect to the Agreement. (See generally ECF No. 24). Buckley seeks the full 25% of Plaintiff's past-due benefits, $45,539.50, less the $6,000.00 he has already received, i.e., $39,539.50. (ECF No. 25 ¶ 8). At 23.6 hours of work, this is an effective hourly rate of $1,675.40. The Court finds this amount to be unreasonable for the following reasons.
$39,539.50 / 23.6.
To determine reasonableness, the Court first considers “the character of the representation and the results the representative achieved.” Fields, 24 F.4th at 849. Here, Buckley's advocacy in this action was professional and effective, prompting the Commissioner to agree to a remand and the SSA to award the result Plaintiff sought-an award of past-due benefits. (ECF No. 20-2). This factor supports a finding of reasonableness. See Munoz, 2023 WL 5310742, at *2 (finding that attorney's efficient efforts obtained a favorable result for plaintiff); Hill, 2023 WL 4827265, at *3 (noting that attorney's work “achieved the exact result Plaintiff sought”); Gray v. Comm'r of Soc. Sec., No. 20 Civ. 3916 (PKC), 2023 WL 3948796, at *3 (E.D.N.Y. June 12, 2023) (same).
Second, the Court must determine Buckley was responsible for unreasonable delays. See Fields, 24 F.4th at 849. Buckley did not request any extensions in this action, although he did not file his reply affirmation until October 5, 2023, almost six months after the Commissioner's opposition. (ECF No. 25). Nevertheless, Buckley's tardy filing has not caused an undue delay in the resolution of this action, which was remanded promptly after the record was filed and before motion practice began. See Hill, 2023 WL 4827265, at *3 (finding that single extension request did not constitute undue delay).
Third, the Court must consider whether the requested amount constitutes a “windfall[,]” which, following Fields, involves analyzing the four factors discussed above. 24 F.4th at 849; see Hill, 2023 WL 4827265, at *3-4. As to the first factor, “the ability and expertise of the lawyers and whether they were particularly efficient,” the Court finds that 23.6 hours is comparable to the amount spent by other experienced benefits practitioners in cases involving remand at a relatively early stage of the action. See Fields, 24 F.4th at 854 (finding that 25.8 hours of attorney time demonstrated particular efficiency that justified $1,556.98 de facto hourly rate); Munoz, 2023 WL 5310742, at *2 (finding that 29.1 hours “was a reasonable amount of time to spend on this case for a lawyer with counsel's experience”); Hill, 2023 WL 4827265, at *3 (finding that 25.6 hours to review 661-page record and draft 16-page opening brief was reasonable); Colon v. Comm'r of Soc. Sec., No. 19 Civ. 2880 (KHP), 2023 WL 2237540, at *2 (S.D.N.Y. Feb. 27, 2023) (finding that 33.1 attorney hours reflected “an efficient use of attorney time”). Buckley, an experienced benefits practitioner since 2009 (ECF No. 20 ¶ 11), achieved a stipulated remand and six-figure benefits award without having to file a motion for judgment on the pleadings, representing a particularly efficient resolution. Therefore, this factor does not warrant a downward adjustment. See Munoz, 2023 WL 5310742, at *2 (finding that experienced counsel's effective and efficient advocacy to bring about positive result did not justify downward adjustment in hourly rate).
As to the second windfall factor, “the nature and length of the professional relationship with the client-including any representation at the agency level[,]” Fields, 24 F.4th at 855, Buckley represented Plaintiff at the agency level, indicating a more extensive relationship that may have enabled Buckley to advocate more efficiently for Plaintiff in this action. (ECF No. 20 ¶ 8). Like Fields, then, this case is distinguishable from those in which a windfall was found. 24 F.4th at 855 (“It is quite likely that the significant investment of time and effort in Mr. Fields's case at the agency level further enabled Binder & Binder to operate with efficiency in the federal courts.”); cf. Munoz, 2023 WL 5310742, at *3 (where attorney did not represent claimant at agency level, finding that this factor “justifie[d] a downward adjustment”).
As to the third windfall factor, “the satisfaction of the disabled claimant[,]” Fields, 24 F.4th at 855, the Court finds that Buckley “achieved a desirable result for Plaintiff.” Munoz, 2023 WL 5310742, at *3. Although Plaintiff has not submitted any statement supporting or opposing the Motion, Plaintiff received a substantial six-figure award of past benefits owed since 2015. (ECF No. 20-2). Thus, this factor does not justify a downward adjustment. See Munoz, 2023 WL 5310742, at *3; Hill, 2023 WL 4827265, at *4; Colon, 2023 WL 2237540, at *2.
Finally, as to the fourth windfall factor, “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 855, the Court notes that, as in Munoz, “this case was not as uncertain as in Fields, where the plaintiff's benefits had been denied a second time, after the first remand by the district court.” Munoz, 2023 WL 5310742, at *3; see Fields, 24 F.4th at 855. Here, like Munoz, “Plaintiff was awarded [SSI] benefits after a single remand, making this case less uncertain.” 2023 WL 5310742, at *3. At a minimum, obtaining the award of benefits for Plaintiff “did not require multiple rounds of representation[,]” which “justifies a slight downward adjustment.” Id.
Based on an analysis of the factors above, the Court finds that $39,539.50 in fees is unreasonable, and respectfully recommends that the award to Buckley be reduced to $35,400.00, which results in a de facto hourly rate of $1,500.00. Although at the higher end of awards in this Circuit, this hourly rate is commensurate with that awarded in Fields and Hill. See Fields, 25 F.4th at 856 n.10 (collecting cases awarding de facto hourly rate between $1,300 and $2,100); Hennelly, 2023 WL 3816961, at *2 (approving de facto hourly rate of $1,705 for experienced counsel); Hill, 2023 WL 4827265, at *3-4 (finding de facto hourly rate of $1,467.30 to be reasonable); Gentile v. Kijakazi, No. 21 Civ. 641 (AMD), 2023 WL 6392905, at *3 (E.D.N.Y. May 3, 2023) (approving de facto hourly rate of $1,750 for experienced counsel); Ricciardi v. Comm'r of Soc. Sec., No. 19 Civ. 3304 (MKB), 2022 WL 1597401, at *4-5 (E.D.N.Y. May 19, 2022) (approving de facto hourly rate of $1,528.56); Bate v. Berryhill, No. 18 Civ. 1229 (ER), 2020 WL 728784, at *3 (S.D.N.Y. Feb. 13, 2020) (approving de facto hourly rate of $1,506.32); Sink, 2020 WL 6827839, at *3 (approving de facto hourly rate of $1,467.00).
Finally, the Court respectfully recommends that Buckley be ordered, on receiving an award of fees pursuant to Section 406(b), to remit the EAJA Fees ($4,091.68) to Plaintiff. See Wells v. Bowen, 855 F.2d 37, 48 (2d Cir. 1988) (“Once appropriate fees under 42 U.S.C. § 406(b) are calculated, the district court should order [the attorney] to return the lesser of either that amount or the EAJA award to his clients.”); Munoz, 2023 WL 5310742, at *3 (ordering plaintiff's attorney to “remit the [amount] received pursuant to the EAJA to Plaintiff”); Hill, 2023 WL 4827265, at *4 (same).
IV.CONCLUSION
For the reasons set forth above, I respectfully recommend that:
(1) the Motion be GRANTED IN PART and DENIED IN PART;
(2) Buckley be awarded attorneys' fees of $35,400.00 pursuant to Section 406(b); and
(3) Buckley be ordered, within five (5) business days of receipt of the attorneys' fees pursuant to Section 406(b), to (a) refund to Plaintiff the $4,091.68 in attorneys' fees previously awarded under the EAJA, and (b) file on the docket a declaration confirming such refund. * * *
NOTICE OF PROCEDURE FOR FILING OBJECTIONS TO THIS REPORT AND RECOMMENDATION
The parties shall have fourteen (14) days (including weekends and holidays) from service of this Report and Recommendation to file written objections pursuant to 28 U.S.C. § 636(b)(1) and Rule 72(b) of the Federal Rules of Civil Procedure. See also Fed.R.Civ.P. 6(a), (d) (adding three additional days when service is made under Fed.R.Civ.P. 5(b)(2)(C), (D) or (F)). 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 response to objections, shall be filed with the Clerk of the Court. See 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 6(a), (d), 72(b). Any requests for an extension of time for filing objections must be addressed to Judge Schofield.
FAILURE TO OBJECT WITHIN FOURTEEN (14) DAYS WILL RESULT IN A WAIVER OF OBJECTIONS AND WILL PRECLUDE APPELLATE REVIEW. See 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 6(a), (d), 72(b); Thomas v. Arn, 474 U.S. 140 (1985).