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Nichols v. Colvin

United States District Court, D. New Hampshire

September 26, 2016

Brian Nichols
Carolyn W. Colvin, Acting Commissioner, Social Security Administration Opinion No. 2016 DNH 173


          Landya McCafferty United States District Judge

         After this matter was remanded to the Social Security Administration (“SSA”), the SSA granted disability insurance benefits (“DIB”) to Brian Nichols. Before the court is a motion for attorneys' fees, pursuant to 42 U.S.C. § 406(b), filed by Nichols' counsel. For the reasons that follow, that motion is granted in part.

         I. Background

         In August of 2014, after being denied DIB by the SSA, Nichols entered into a contingent fee agreement with attorney Francis M. Jackson for representation in this court on an appeal from the SSA's adverse decision. In that agreement: (1) Nichols acknowledged that attorney Jackson's services would ordinarily be billed at an hourly rate of more than $350; (2) attorney Jackson agreed to take no fee if he was unsuccessful in securing an award of past-due benefits; and (3) Nichols agreed to pay attorney Jackson “a fee equal to twenty five percent (25%) of the total amount of any past-due benefits awarded to [him].” Doc. no. 10-2, at 2.[1]

         In September of 2014, two lawyers from Jackson's firm, Karen Fitzmaurice and Penelope Gronbeck, filed: (1) a complaint seeking judicial review of the SSA's decision; (2) a motion for attorney Gronbeck to appear pro hac vice; and (3) a motion to proceed in forma pauperis. In December, the SSA filed an assented to motion to remand the matter under sentence four of 42 U.S.C. § 405(g), and judgment was entered in Nichols' favor. Nichols then moved for $615.81 in fees and expenses under the Equal Access to Justice Act (“EAJA”), 28 U.S.C. § 2412. The amount of that request was based upon 2.85 hours of attorney work (billed at $192.39 per hour) and .75 hours of paralegal work (billed at $90 per hour). The Acting Commissioner stipulated to the motion, and the court granted it. In an affidavit submitted in support of the EAJA fee request, attorney Jackson testified that he represented Nichols in this matter and that he has been paid at “rates of $395.00 or more per hour . . . in Social Security cases by ALJ's.” Doc. no. 8-2, at 2.

         On remand, Nichols received a favorable decision from the SSA and an award that included $45, 514 in past-due benefits. In addition, the SSA approved a payment of $6, 000 in attorneys' fees pursuant to 42 U.S.C. § 406(a).[2]

         This motion followed. In it, claimant's counsel seeks $5, 378.50 in fees, to be paid out of Nichols' award of past-due benefits. The amount counsel seeks, plus the $6, 000 already approved by the SSA, minus the EAJA award of $615.81, [3] would bring the attorneys' fees in this case up to $11, 378.50, which is 25 percent of the total amount of past-due benefits the SSA awarded to Nichols. Given the 3.6 hours that Nichols' counsel put into this case, the fee he seeks works out to an hourly rate of $1, 494.03.

         II. Discussion

         Nichols has expressed no opinion on his counsel's motion for fees. The Acting Commissioner, however, has filed a response in which she neither assents nor objects to the amount that counsel requests but, rather, seeks to assist the court in determining whether the fee that Nichols' counsel requests is reasonable. She then goes a step further, proposing two alternative calculations, each of which yields a § 406(b) fee that is significantly lower than the amount counsel requests.

         In the discussion that follows, the court begins with the applicable law, and then applies the law to the facts of this case. The Social Security Act provides, in pertinent part:

Whenever a court renders a judgment favorable to a claimant under this subchapter 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 of the past-due benefits to which the claimant is entitled by reason of such judgment . . .

42 U.S.C. § 406(b)(1)(A).

         In Ezekiel v. Astrue, 853 F.Supp.2d 177 (D. Me. 2012), Judge Hornby was presented with a factual scenario remarkably similar to the circumstances of this case: (1) a remand from the district court secured after claimant's counsel had put in between three and four hours of work; (2) an award of past-due benefits by the SSA; and (3) a request for fees from the award that would have brought the claimant's attorney's fee to a full 25 percent of the past-due benefits awarded to the claimant. Judge Hornby, however, awarded less than the claimant's counsel had requested. In so doing, he was guided by the U.S. Supreme Court's decision in Gisbrecht v. Barnhart, 535 U.S. 789 (2002).

         In Gisbrecht, attorneys for three Social Security claimants sought fees, under 42 U.S.C. § 406(b), in amounts that brought their total fees up to 25 percent of their clients' awards of past-due benefits. See 535 U.S. at 797. The Court's key legal ruling was that when considering a request for fees under § 406(b), the starting point for determining the reasonableness of the requested fee is the contingent-fee agreement between the claimant and his or her attorney, rather than the so-called lodestar, i.e., a figure calculated by multiplying the attorney's hourly rate by the number of hours spent on legal work. See Id. at 807. However, the Court also observed that “[i]f the benefits are large in comparison to the amount of time counsel spent on the case, a downward adjustment [from the amount allowed by a contingent-fee agreement] is . . . in order.” Id. at 808 (citing Rodriquez v. Bowen, 865 F.2d 739, 746 (6th Cir. 1989) (noting that 25 percent contingency fee is “a starting point for the ...

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