United States District Court, N.D. Indiana
OPINION AND ORDER
William C. Lee, Judge United States District Court
matter is before the court on a motion for an award of
attorneys fees under 42 U.S.C. §406(b), filed by the
Plaintiff, Charlene Johnson, on February 2, 2017. The
defendant Commissioner filed a response on March 7, 2017,
indicating no opposition to the motion.
filed claims for Disability Insurance Benefits (DIB - Title
II) and Supplemental Security Income Benefits (SSI - Title
XVI) on October 15, 2010. (Dkt. 15 at 141-53) Plaintiff's
claims were denied on February 3, 2011. (Dkt. 15 at 93-100)
Plaintiff filed a request for reconsideration on March 14,
2011, (Dkt. 15 at 101), but was denied again on July 21,
2011. (Dkt. 15 at 102-07) Plaintiff requested an
administrative hearing on September 2, 2011. (Dkt. 15 at
retained Keller & Keller LLP for representation October
23, 2012. (Dkt. 15 at 132-33) Plaintiff agreed that “if
any of my claim(s) progress to the U.S. Courts and is then
favorably decided, then my attorney may elect to motion the
U.S. Courts to approve a fee of 25% of all past due benefits
without limitation pursuant to 42 U.S.C. section 406(b) . . .
.” (Plaintiff's Exhibit A)
November 6, 2012, Plaintiff appeared in Valparaiso, Indiana,
for a hearing before Administrative Law Judge (ALJ) Mark
Naggi of the Office of Disability Adjudication and Review
(ODAR). (Dkt. 15 at 29-88) On March 7, 2013, ALJ Naggi issued
an unfavorable determination. (Dkt. 15 at 9-27) Plaintiff
filed a request for review with the Appeals Council, but the
Appeals Council denied the request on May 30, 2014. (Dkt. 15
then timely filed this civil action on July 31, 2014. (Dkt.
1) On August 28, 2015, this Court issued an order to reverse
and remand the case for further consideration pursuant to
sentence four of 42 U.S.C. § 405(g). (Dkt. 35) On
December 3, 2015, Plaintiff's attorney obtained an order
for an award of attorney's fees under the Equal Access to
Justice Act (“EAJA”), 28 U.S.C. §
2412(a)-(d), from this Court in the amount of $4, 498.50.
(Dkt. 40) Plaintiff's attorney did not receive this
payment, because the payment was applied to Plaintiff's
existing debt owed to the U.S. Department of Education.
(Plaintiff's Exhibit E) After the claim was reconsidered
by the agency, Plaintiff's claim for benefits was
approved on August 25, 2016. (Plaintiff's Exhibit B)
Plaintiff was awarded past-due benefits totaling $48, 145.00.
(Plaintiff's Exhibit C at 4)
Social Security Act's provisions governing fees for
representation are found in 42 U.S.C. § 406; see
Gisbrecht v. Barnhart, 535 U.S. 789, 794 (2002)
(reviewing history of attorney fees under the Social Security
Act). Section 406(a) governs fees for representing claimants
in the administrative process, so a federal court does not
determine whether to award any fee for representation under
section 406(a). 42 U.S.C. § 406(a). Section 406(b)
governs attorney fees for successful litigation for benefits
under Title II of the Social Security Act such as Disability
Insurance Benefits, 42 U.S.C. §§ 416(I), 423, and,
pursuant to § 302 of Public Law 108-203, for litigation
for benefits under Title XVI of the Social Security Act or
Supplemental Security Income, 42 U.S.C. §§ 1382,
1382a. 42 U.S.C. § 406(b). Section 406(b)(1) provides:
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 of the past-due benefits . . . . 42
U.S.C. § 406(b)(1).
court must review all fee requests under § 406(b).
Congress intended such review not to override the claimant
and counsel's fee arrangement but rather to act as an
“independent check” to ensure that the
arrangement yielded a reasonable result in the particular
case. Gisbrecht, 535 U.S. at 807. “Congress
has provided one boundary line: Agreements are unenforceable
to the extent that they provide for fees exceeding 25 percent
of the past-due benefits.” Id. Within the 25%
boundary, the attorney for the successful claimant must show
that the fee sought is reasonable for the services rendered.
Id. In making this determination, the court may
consider the character of the representation and the results
obtained, reducing an award if the attorney is responsible
for delay in the proceeding that had the effect of inflating
past-due benefits, or if the fee is so large in comparison to
the amount of time counsel spent on the case that the fee
would constitute a windfall to the attorney. Id. at
present case, Plaintiff's attorney contends that the
requested fee of $12, 036.25 is reasonable. This amount
reflects a valid contract between Plaintiff and his counsel,
the substantial risk associated with this litigation and
potential recovery, the results obtained for the Plaintiff,
the time Counsel expended on the matter, and the award - but
not receipt - of an EAJA fee.
contracted with Plaintiff's attorney to pay 25 percent of
past due benefits without limitation if the undersigned
represented her before a federal court and obtained a
favorable outcome. (Plaintiff's Exhibit A) After this
litigation, Plaintiff received as past-due Title II benefits
$48, 145.00. (Plaintiff's Exhibit C) Plaintiff's
attorney requests that the Court approve an overall award of
$12, 036.25-or 25 percent of the Plaintiff's past-due
benefits. This award is within the statutory maximum of 25
percent of past due benefits and in accordance with what the
Plaintiff contracted to pay Counsel.
attorney submits that the requested fee is reasonable because
the requested fee reflects the contingent nature of the
recovery. Civil actions for Social Security claimants possess
a substantial risk of loss. Between 2005 and 2010, federal
district courts affirmed approximately half of the appealed
administrate decisions denying such claimants benefits.
See Aspects of Disability Decision Making, Social
Security Advisory Board, July 2012, Chart 65. It was
also uncertain that Plaintiff's claim would be approved
following a federal court remand. Id. at Chart 51.
Because Plaintiff's attorney may only collect a 42 U.S.C.
§ 406(b) fee from those who ultimately receive benefits,
the risk associated with engaging in such litigation is
attorney further contends that the requested fee is
reasonable because Plaintiff ultimately recovered $48, 145.00
in past-due benefits. Counsel's requested fee- $12,
036.25-is considerably less than a typical contingent fee
recovery. See Herbert M. Kritzer, The Wages of
Risk: The Returns of Contingency Fee Legal Practice, 47
DePaul L. Rev. 267, 285 (1998); cf. Continental Illinois
Securities Litigation, 962 F.2d 566, 572 (7th Cir. 1992)
(Posner, J.) (“We know that in personal-injury suits
the usual range for contingent fees are between 33 and 50
percent”). Moreover, while Plaintiff's attorney is
seeking a fee solely from Plaintiff's past-due benefits,
Plaintiff will receive much more due to Counsel's efforts
before this Court. She will receive ongoing benefits until
she dies, reaches retirement age, or becomes no longer
disabled. She will also be entitled to the value of health
care benefits which accompany her concurrent award of
benefits under Title II. Thus, Counsel's requested fee
reasonably compensates him for the substantial monetary and
other benefits which resulted from this litigation.
requested fee also reflects the time and attention which
Keller & Keller LLP devoted to Plaintiff's case
before this Court. Counsel spent a total of 16.1 attorney
hours and 15.2 non-attorney hours on the civil litigation.
(Plaintiff's Exhibit D) This equates to approximately a
$385 per hour fee. If approved for the full amount of this
request, Plaintiff's counsel indicates that ...