United States District Court, S.D. Indiana, New Albany Division
BAKER, UNITED STATES MAGISTRATE JUDGE
said that time is money. This proverb rings true here, where
Plaintiff Jessica Ann Hilbert's counsel, Tim E. Staggs,
filed the instant motion for attorney's fees one year
after Hilbert received her Social Security benefits award.
This passage of time has prejudiced Hilbert by delaying her
receipt of additional past-due benefits. For reasons
explained below, time has overtaken counsel's ability to
directly collect attorney's fees. The present motion
[Filing No. 34] is denied.
3, 2013, counsel initiated the appeal of the
Commissioner's decision to deny Hilbert's claim for
Social Security benefits. On July 25, 2014, the Court
remanded the case for reconsideration, which resulted in a
favorable decision for Hilbert. On November 6, 2014, the
Court issued an order, awarding Hilbert's counsel $6,
847.47 of attorney's fees under the Equal Access to
the agency approved Hilbert's claim, it sent a July 28,
2015, award letter. The letter explained that Hilbert's
past-due benefits totaled $65, 504, of which $16, 376 would
be withheld for possible payment of attorney's fees. On
September 14, 2015, the agency sent Hilbert another award
letter, informing her that her two children were also
entitled to benefits on her earnings record and that the
agency was withholding $4, 087.50 from each child's
past-due benefits for possible payment of attorney's
to 20 C.F.R. § 404.1730(c)(1), to receive attorney's
fees directly from Hilbert's past-due benefits, her
counsel “should file a request for approval of a fee,
or written notice of the intent to file a request …
within 60 days of the date we mail the notice of the
favorable determination or decision.” If counsel fails
to make a request within 60 days, § 404.1730(c)(2)(i)
provides that the agency will mail a written notice that
“unless the representative files, within 20 days from
the date of the notice, a written request for approval of a
fee under § 404.1725, or a written request for an
extension of time, we will pay all the past-due benefits to
you.” Then, subject to approval, “the collection
of any approved fee is a matter between you and the
representative.” § 404.1730(c)(2)(ii).
November 28, 2015, the agency sent a letter to Hilbert's
counsel that $18, 551 of Hilbert's past-due benefits were
being withheld in anticipation of directly paying an
attorney's fee. The letter asked whether counsel intended
to file a fee petition. Counsel did not respond.
March 27, 2016, the agency sent another letter to counsel,
advising that the agency did not wish to delay releasing
past-due benefits. The letter expressly invoked the 20-day
deadline pursuant to § 404.1730(c)(2)(i), which gave
Hilbert's counsel until April 18, 2016, to request fees
or an extension. On April 4, 2016, counsel responded in a
letter, acknowledging the deadline. On April 18, 2016,
counsel sent another letter, advising that a fee petition
would be filed “as soon as possible.” [Filing
No. 43-1, at ECF p. 30.] Counsel did not file a fee
petition or request an extension of time on or before April
27, 2016, the agency sent another letter to counsel,
referencing the March letter, asking counsel whether there
was any reason Hilbert's withheld past-due benefits
should not be released to her. On July 29, 2016, counsel
filed the present motion, seeking direct payment of
attorney's fees from Hilbert's withheld past-due
benefits in the amount of $10, 376. The Commissioner objects,
arguing the motion should be denied because Hilbert's
counsel failed to file a fee petition within a reasonable
time. Hilbert's counsel did not reply and the time to do
so has now passed.
Seventh Circuit Court of Appeals has held that “a
petition for fees under § 406(b)(1) must be brought
within a reasonable time.” Smith v. Bowen, 815
F.2d 1152, 1156 (7th Cir. 1987). However, what
constitutes a reasonable time was not explained by the court.
Since the “reasonable time” standard was
identified in Smith, courts have grappled with what
constitutes a reasonable amount of time for making a §
406(b) fee request.
Bassett v. Astrue, No. 09-cv-3231, 2012 WL 295068,
*2 (C.D. Ill. 2012), the court found that a four-and-a-half
month delay between counsel's fee petition and
plaintiff's benefit award was reasonable. However, in
Hill v. Colvin, No. 1:11-cv-134, 2016 WL 2643360, *5
(N.D. Ind. 2016), the court found that nine months caused a
timeliness issue. Similarly, in Blow v. Colvin, No.
1:11-cv-293, 2015 WL 4591655, *3 (N.D. Ind. 2015), an
18-month delay was found unreasonable. And in Cox v.
Astrue, No. 3:07-cv-234, 2011 WL 2692910, *2 (N.D. Ind.
2011), the court found that a two-year interval between
counsel's fee petition and receipt of notice of award was
per se unreasonable.
other hand, in Vanbuskirk v. Colvin, No.
1:10-cv-360, 2015 WL 3439228, *3 (N.D. Ind. 2015), counsel
filed a fee petition two years after plaintiff received the
benefit award and the court granted the request over the
Commissioner's objection. The Vanbuskirk
decision is distinguishable because there was no sum of money
remaining after the fee award, thus the delay had no effect
on the plaintiff. Id. As such, the reasonableness of
a delay in making the fee petition is more difficult to show
where money rightfully due plaintiff is being withheld.
See e.g., Blow v. Colvin, No. 1:11-cv-293,
2015 WL 4591655, *4 (N.D. Ind. 2015) (finding the delay was
not reasonable because it deprived plaintiff of timely
receiving additional withheld past-due benefits).
clear reason, Hilbert's counsel shows little interest in
collecting fees that are being withheld from Hilbert and
apparently due to him. One full year has passed since the
agency first informed counsel that a petition for fees needed
to be filed. According to the regulations, counsel was
supposed to file a fee petition within 60 days of the award.
However, counsel filed the petition one year after the award,
despite earlier prompts by the Commissioner. Four months
after Hilbert was awarded benefits, the agency sent her
counsel a reminder to file a fee petition. This letter went
unheeded and an additional four months later, the agency sent
counsel another reminder, which explicitly triggered the
final 20-day deadline. At this point, the clock began
counting down on counsel's ability to file a petition for
fees. On the date of the 20-day deadline, counsel responded
that a fee petition would be made “as soon as
possible.” However, that deadline passed without
counsel filing a fee petition or a request for additional
time. This is the pivotal moment for the instant motion. When
the 20-day deadline passed without a proper filing by
counsel, this motion was doomed.
fee petition was not brought within a reasonable time.
Significantly, this is a case where money rightfully due to
Hilbert has been needlessly withheld for an excessive amount
of time. In total, the agency withheld $24, 551 of Hilbert
and her children's past-due benefits for potential
payment of attorney's fees. Of this amount, the agency
paid counsel $6, 000 as the approved attorney fee for
administrative services under 406(a). Hilbert's counsel
now requests an attorney fee of $10, 376 for work at the
district court under 406(b), which would leave Hilbert the
remaining $8, 175. Counsel's delay has unfairly
prejudiced Hilbert by depriving her of the timely receipt of
this sizable amount. See Blow, 2015 WL
4591655, *4 (“there is a sum remaining after the fee
award, and thus, the delay has prejudiced
facts show that counsel essentially ignored the agency's
repeated notices and letters advising counsel that he must
file a fee petition within the allowed time. When counsel did
communicate with the agency, it was not to request additional
time or request fees. Rather, counsel's short letter
suggested a fee request was forthcoming, but delayed due to
counsel's lack of familiarity with § 406(b).
However, more than three more months passed before counsel
filed the fee petition, after more prompting by the
Commissioner. Section 406(b) is a rather short,
straight-forward statute which should not take counsel months
to research. Counsel failed to present any reasons for making
an untimely request for fees and he failed to reply to the
Commissioner's objection. The Court can ...