Opinion
Civil Action No. 96-1171-P-S.
August 29, 2000.
REPORT AND RECOMMENDATION
This cause is before the Magistrate Judge for report and recommendation pursuant to 28 U.S.C. § 636 (b)(1)(B) and Rule 54(d)(2)(D) of the Federal Rules of Civil Procedure on the petition for authorization of attorney's fees filed by counsel for the plaintiff (hereinafter, Petitioner) and the Defendant's response to the petition. Upon consideration of all pertinent materials contained in this file, it is determined that the Petitioner should receive a reasonable fee in the amount of $2,567.57.
FINDINGS OF FACT
1. Attorney Byron A. Lassiter was retained by the Plaintiff to represent her in connection with her claim for disability insurance benefits (Doc. 19). Plaintiff agreed to the payment of an attorney's fee equaling twenty-five percent (25%) of all past-due benefits payable to her if an appeal to a United States federal court was necessary from an administrative denial of benefits (Id.).
2. On April 26, 1999, the undersigned entered a report and recommendation that this cause be reversed and remanded to the Commissioner, pursuant to sentence four of 42 U.S.C. § 405 (g), for payment of benefits (Doc. 15). Senior United States District Judge Virgil Pittman entered judgment awarding benefits on June 18, 1999 (Doc. 18).
3. Following remand, the Social Security Administration awarded Plaintiff benefits (Doc. 19). The Administration withheld a total of $17,250.50 from Plaintiff's past-due disability insurance benefits for the payment of attorney's fees (Id.).
4. Petitioner requests that this Court authorize an award of $17,250.50 for the 10.45 hours he spent representing Plaintiff's interests before this Court (Doc. 19).
5. Petitioner filed his petition for authorization of attorney's fees on July 7, 2000 (Doc. 19). On August 23, 2000, the Defendant filed a response to Petitioner's petition, and therein stated that, while Defendant does not object to the reasonableness of the total number of hours spent by Petitioner in his representation of Plaintiff, Defendant does object to and argues that the amount requested, $17,250.50, is unreasonable (Doc. 26).
CONCLUSIONS OF LAW
1. Section 206(b) of the Social Security Act, codified at 42 U.S.C. § 406 (b), provides that a court which renders a favorable judgment to a Social Security claimant may award the claimant's attorney a reasonable fee for his representation of the claimant "not in excess of 25 percent of the total of past-due benefits to which the claimant is entitled." Section 406(b) thus "provides for contingent fees to be charged to the client with the amount to be set by the district court subject to a statutory maximum." Watford v. Heckler, 765 F.2d 1562, 1566 (11th Cir. 1985) (citations omitted) (emphasis added); see Meyer v. Sullivan, 958 F.2d 1029, 1035 n. 12 (11th Cir. 1992) (the total amount of attorney's fees that may be awarded under the act is limited to 25% of the past-due benefits awarded).
2. Previously, this Court followed the Second, Sixth and Seventh Circuits and calculated fee awards under § 406(b) using the "contingent fee" approach. Under this approach, where a claimant had signed a contingency agreement for an amount falling within the statutory cap of 25% of past-due benefits, the court deferred to the contract amount of fees unless there was evidence suggesting that the amount was unreasonable. See Wells v. Sullivan, 907 F.2d 367, 371 (2d Cir. 1990) (the district court must begin with the agreement and may only "reduce the amount called for by the contingency agreement, when it finds the amount to be unreasonable."); McGuire v. Sullivan, 873 F.2d 974, 981 (7th Cir. 1989) (the fee agreement entered into by the parties should be the starting place for a court's review but that amount may be reduced where appropriate); Rodriquez v. Bowen, 865 F.2d 739, 746 (6th Cir. 1989) (the court should start with the agreement but deductions may be made due to improper conduct or ineffectiveness of counsel or where counsel would otherwise enjoy a windfall because of either an inordinately large benefit award or from minimal effort expended).
3. In Kay v. Apfel, 176 F.3d 1322, 1323 (11th Cir. 1999), the Eleventh Circuit specifically rejected the "contingent fee" approach to calculation of attorney's fees under § 406(b) in favor of the "lodestar" approach employed by the majority of circuits. "[W]e hold that the lodestar method applies to the determination of attorney's fees in Social Security cases under 42 U.S.C. § 406 (b), even where counsel and the claimant contractually agreed to a contingency fee arrangement."Id. at 1325.
4. Under the lodestar method, a district court arrives at a lodestar figure "`by multiplying the number of hours reasonably expended by a reasonable hourly rate.'" Id. at 1324 (citations omitted). The court may then adjust the lodestar figure, upward or downward, to reflect a number of different factors which were originally identified in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir. 1974). Id. at 1327. The Johnson factors are:
(1) the time and labor required; (2) the novelty and difficulty of the questions; (3) the skill required to perform the legal service properly; (4) the preclusion of other employment by the attorney due to the acceptance of the case; (5) the customary fee; (6) whether the fee is fixed or contingent; (7) time limitations imposed by the client or the circumstances; (8) the amount involved and the results obtained; (9) the experience, reputZtion and ability of the attorney; (10) the undesirability of the case; (11) the nature and length of the professional relationship with the client; and (12) award in similar cases.Id. (citing 488 F.2d at 717-719).
5. Turning first to what the lodestar figure in this case should be, the undersigned notes that the Defendant does not question Petitioner's assertion that he spent a total of 10.45 hours representing Plaintiff in this Court. Furthermore, the undersigned finds that the 10.45 hours claimed by Petitioner for the various tasks reflected on the itemized statement is reasonable. Accordingly, the undersigned concludes that Petitioner reasonably spent 10.45 hours on legal tasks in this case.
6. In determining a reasonable hourly rate, the undersigned notes that the prevailing market rate in the Southern District of Alabama is $117.00 an hour. See Woodward v. Apfel, CA 95-1009-P-M (recognizing a prevailing market rate of $117.00); Haywood v. Apfel, CA 950130-AH-M (same). This is the rate this Court has consistently awarded to attorneys of comparable skills, experience and reputation for similar services.
7. Multiplying $117.00 by 10.45 hours, the undersigned arrives at a lodestar figure of $1,222.65.
8. The undersigned is of the opinion that the foregoing lodestar figure should be multiplied by an adjustment figure of 2.1, based upon application of the following Johnson factors:
(a) Time and labor required. There is no indication that the amount of time expended by Petitioner in this action is unusual; therefore, no adjustment is required.
(b) Novelty and difficulty of the questions. In Plaintiff's statement of issues, Petitioner, on behalf of Plaintiff, raised four separate claims: a treating physician claim, a hypothetical question claim, a substitution of opinion claim, and a past relevant work claim. While these claims are not novel, given the nature of Plaintiff's medical history and physical disability, the issues in this action are found to be difficult in that they are significantly facts-intensive. Petitioner was successful in identifying and developing these claims in his statement of issues. For his efforts, the Court finds that an adjustment factor of .1 is appropriate.
(c) Skills required. Because of the nature of Plaintiff's claims, her medical history, and the state of the administrative record, more than average skill was required on the part of the Petitioner to identify, develop, and adequately argue these issues on appeal. For Petitioner's efforts, the Court finds that an adjustment factor of .2 is appropriate.
(d) Preclusion of other employment. This Court has no information which indicates that Petitioner was precluded from accepting other gainful employment due to the acceptance of this action. Therefore, no adjustment is made.
(e) Customary fee. The Court has no information on which to find that an adjustment is appropriate for this factor.
(f) Nature of the fee. As set forth above, Petitioner entered into a contractual arrangement with Plaintiff to collect 25% of Plaintiff's past due benefits. Included in the record is an affidavit signed by Plaintiff (Doc. 21) in which she states that she has no objection to Petitioner being paid 25% of her past due benefits. Based on this information, the Court finds that an adjustment factor of .2 is appropriate.
(g) Time limitations. This Court has no information which reveals that any unusual time limitations were imposed on Petitioner by the client or the circumstances; therefore, no adjustment is made.
(h) Amount involved/results obtained. This action involves the payment of a substantial amount in past due benefits. As a result of Petitioner's successful prosecution of this action, Plaintiff received a significant lump sum payment representing past due benefits and now receives monthly payments for her disability. The Court finds that an adjustment factor of .1 is appropriate under the circumstances.
(i) Experience, reputation and ability of the attorney. Petitioner is an extremely experienced, reputable and capable lawyer. Most, if not all, of his practice is focused in the area of social security law. Given Petitioner's experience, reputation, and ability, the Court finds that an adjustment factor of .3 is appropriate.
(j) Undesirability of the case. The Court has no information which would indicate that this case was undesirable; therefore, no adjustment is required.
(k) Nature and length of the professional relationship with client. Petitioner has had a lengthy attorney-client relationship with Plaintiff and has represented Plaintiff for many years with respect to her claims for disability benefits. Petitioner represented Plaintiff beginning sometime in 1990 regarding a prior application and pursued that case through federal court. Petitioner has now represented Plaintiff in the current action since late 1996, a period of over three years. Given this history, and the long-term relationship between Petitioner and Plaintiff, the Court finds that an adjustment factor of .1 is appropriate.
(l) Awards in similar cases. Petitioner has received an award of attorney's fees in at least one other action in which the lodestar amount was increased by the application of adjustment factors. See Larry v. Apfel, C.A. 96-1119-P-C. Accordingly, this Court finds that an adjustment factor of .1 is appropriate.
9. Multiplying the lodestar figure of $1,222.65 by the adjustment figure of 2.1 results in an award of $2,567.57 in attorney's fees to the Petitioner:
CONCLUSION
The Magistrate Judge recommends that Petitioner be awarded attorney's fees in the amount of $2,567.57, under 42 U.S.C. § 406 (b).