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Thompson v. Commissioner of Social Security

United States District Court, N.D. Indiana, Fort Wayne Division

April 27, 2017

TY R. THOMPSON, Plaintiff,
v.
COMMISSIONER OF SOCIAL SECURITY, sued as Nancy A. Berryhill, Commissioner of Social Security, [1] Defendant.

          OPINION AND ORDER

          Susan Collins, United States Magistrate Judge

         Plaintiff Ty R. Thompson brought this suit to contest a denial of disability benefits by Defendant Commissioner of Social Security (“Commissioner”). (DE 1). On April 19, 2015, pursuant to the parties' joint motion to remand (DE 18), the Court entered an Order that reversed the Commissioner's denial of benefits and remanded the case for further proceedings. (DE 19; DE 20).

         Thompson's attorney, Joseph Shull, now moves pursuant to 42 U.S.C. § 406(b) for the Court's authorization of attorney fees in the amount of $14, 618.00 for his representation of Thompson in federal court. (DE 26). The Commissioner has no objection to Shull's request for fees (DE 29), and thus, the motion is ripe for ruling. For the following reasons, Shull's motion for attorney fees will be GRANTED, subject to an offset and an adjustment explained herein.

         A. Factual and Procedural Background

         On September 15, 2014, Shull entered into a contingent fee agreement with Thompson for his representation of Thompson in federal court.[2] (DE 27-4). The agreement provided that Shull would “charge and receive as his fee an amount equal to twenty-five percent (25%) of the past-due benefits which are awarded to [Thompson and his family] in the event [his] case is won.” (DE 27-4).

         On September 16, 2014, Thompson filed the instant action with this Court, appealing the Commissioner's denial of his application for disability benefits. (DE 1). On April 8, 2015, pursuant to the parties' joint motion to remand (DE 18), Thompson received a favorable judgment from this Court, and the case was remanded to the Commissioner for further proceedings. (DE 19; DE 20).

         On June 23, 2015, Thompson filed a request for attorney fees under the Equal Access to Justice Act (“EAJA”), 28 U.S.C. § 2412, seeking payment for the 24.75 hours that Shull spent advocating his claim in federal court. (DE 22 to DE 25). The Court granted Thompson an EAJA fee award of $4, 727.25. (DE 25).

         On June 8, 2016, the Commissioner sent a notice of award to Thompson, stating that he was entitled to monthly disability benefits beginning August 2011 and past-due benefits in the amount of $46, 037.80 for himself and $24, 322.00 for his child. (DE 27-1 at 1; DE 27-2 at 1). The notice further explained that the Commissioner had withheld 25 percent of Thompson's past-due benefits to pay his attorneys and that any remainder after doing so would be sent to Thompson. (DE 27-1 at 3; DE 27-2 at 2).

         On October 25, 2016, the Commissioner sent a letter to Shull stating that it had been withholding $14, 618.00-which it stated was the balance of 25% of the past-due benefits payable to Thompson. (DE 27-3). The Commissioner acknowledged that it had already paid $6, 000 in attorney fees under § 406(a), which Shull represents was paid to Attorney Ann Tryznka who represented Thompson at the administrative level. (DE 27-3). On April 13, 2017-approximately 10 months after Thompson received his disability benefits award-Shull filed the instant motion seeking fees under § 406(b). (DE 26).

         B. Legal Standard

         Fees for representing Social Security claimants, both administratively and in federal court, are governed by 42 U.S.C. § 406. Gisbrecht, 535 U.S. at 793-94. Section 406(a) controls fees for representation in administrative proceedings, and § 406(b) controls attorney fees for representation in court. Id. Unlike fees obtained under the EAJA, [3] the fees awarded under § 406 are charged against the claimant, not the government. Id. at 796.

         Under § 406(a), an attorney who has represented a claimant may file a fee petition or fee agreement with the Commissioner to receive fees for his or her representation at the administrative level. 42 U.S.C. § 406(a); Gisbrecht, 535 U.S. at 794-95; 20 C.F.R. §§ 404.1725(a), 416.1525(a). There are, however, limits on the amount that the Commissioner can award pursuant to § 406(a). Gisbrecht, 535 U.S. at 794-95.

         Under § 406(b), an attorney who has successfully represented a claimant in federal court may receive “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 . . . .”[4] 42 U.S.C. § 406(b)(1)(A); Gisbrecht, 535 U.S. at 795. Furthermore, § 406(b) has been harmonized with the EAJA; although fee awards may be made under both the EAJA and § 406(b), a claimant's attorney must refund to the claimant the amount of the smaller fee that the attorney received. Gisbrecht, 535 U.S. at 796 (explaining that “an EAJA award offsets an award under Section 406(b)”).

         Unlike the award by the Commissioner under § 406(a), the court is required under § 406(b) to review for reasonableness the attorney fees yielded by contingent fee ...


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