United States District Court, N.D. Indiana, South Bend Division
OPINION AND ORDER
P. SIMON, JUDGE UNITED STATES DISTRICT COURT
matter is before me on Plaintiff's counsel's Motion
for Authorization of Attorney Fees Pursuant to 42 U.S.C.
§ 406(b), DE 30, which seeks $12, 645.00 in
attorney's fees, a percentage of the past-due Social
Security Disability Insurance Benefits awarded by the
Commissioner of Social Security to Plaintiff. For the reasons
explained in detail below, I find the request reasonable and
the motion is GRANTED.
being denied Disability Insurance benefits under the
provisions of the Social Security Act, Plaintiff appealed her
case to this Court on March 31, 2015. [DE 1.] On December 14,
2015, I granted the Parties' Joint Motion to Remand
pursuant to sentence four of 42 U.S.C. § 405(g) for
further proceedings and a new decision by the ALJ. [DE 22.]
On March 29, 2016, I granted Plaintiff's Motion for
Attorney Fees pursuant to the Equal Access to Justice Act.
remand from this Court, Plaintiff then received a Notice of
Award (“NOA”) from the Commissioner in her favor.
The NOA awarded Plaintiff $85, 306.00 in total back benefits.
[DE 30 at 6-11.] The Commissioner withheld $20, 645.00 of the
award for Plaintiff's counsel for his work on the case.
[Id. at 8.] Plaintiff now asks me to approve a fee
authorization in the amount of $12, 645.00 pursuant to
Section 206(b)(1) of the Social Security Act. Plaintiff's
counsel represents that he will request that the Social
Security Administration approve $8, 000.00 as his fee for
work before the agency, thus requesting a total of $20,
645.00, the total amount withheld by the Commissioner, for
work before the agency and federal court. [Id. at
2.] The Government has not objected to the request.
406(b) of the Social Security Act provides: “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). Section
406(b) is intended to control, but not displace, contingent
fee arrangements. Gisbrecht v. Barnhart, 535 U.S.
789, 793 (2002). The district court is to review the amount
set by the fee agreement for reasonableness based on
“the character of the representation and the results
the representative achieved.” Id. at 807. The
Supreme Court described three situations in which courts have
appropriately reduced fees as unreasonable: (1) the
representation is substandard, (2) counsel's delay caused
past-due benefits to accumulate during the pendency of the
case in court, and (3) past-due benefits are large in
comparison to the amount of time counsel spent on the case.
Id. at 808.
Plaintiff entered into a twenty-five-percent contingency fee
agreement with her attorney, Steven T. Parkman, and his
associates. [DE 30 at 12.] Plaintiff was awarded past due
benefits in the amount of $85, 306.00, and the Commissioner
withheld slightly less than 25%, $20, 645, in case Plaintiff
needed to pay counsel, $12, 645 of which counsel now asks me
to award him. This amount is reasonable. First, Attorney
Parkman and his associates' representation was not
substandard. On the contrary, after drafting and filing an
opening brief in this action, counsel secured a remand from
this court and reversal of the original administrative
decision resulting in the Plaintiff receiving a full
favorable decision and an award of six years of retroactive
benefits. Further, counsel did not cause any unnecessary
counsel worked on contingent fee basis, so the risk that he
won't recover for his client, and thus won't be paid
at all, has to be priced in to the computation of a
reasonable fee. See Bastic v. Bowen, 691 F.Supp.
1176, 1177 (N.D. Ill. 1988) (“[A] universe in which
lawyers go wholly unpaid in cases they lose, but are paid for
the cases they win at rates that fail to reflect the risk of
loss, is a distorted universe.”). The risk of no
recovery is high in a Social Security case. See Martinez
v. Astrue, 630 F.3d 693, (7th Cir. 2011) (discussing a
study finding 65.05% of Social Security appeals resulted in
an affirmance of the denial of benefits). In this context,
then, an award of $12, 645 is not unreasonable. And awards of
larger size have been approved in this district. See,
e.g. Soptich v. Colvin, No. 3:15-CV-109, 2017 WL 711021,
at *2 (N.D. Ind. 2017) (approving award of $18, 646);
Denune v. Colvin, No. 1:11-CV-64, 2014 WL 3899308,
at *4 (N.D. Ind. 2014) (approving award of $24, 830);
Sparrow v. Astrue, No. 3:07-CV-506-TLS, 2010 WL
2195276, at *1 (N.D. Ind. 2010) (approving award of $17,
322.10). Attorney Parkman achieved the result his client
sought in filing the suit and should be properly compensated
for his work.
is one final piece of business. Attorney Parkman already has
received $6, 278.73 in EAJA fees. While fee awards may be
made under both Section 406 and the EAJA, the attorney must
refund to the claimant the amount of the smaller fee.
Gisbrecht, 535 U.S. at 796. Parkman has agreed to
refund the smaller of the EAJA award or the award under
Section 406. [DE 30 at 5.]
counsel's Motion for Authorization of Attorney Fees
Pursuant to 42 U.S.C. § 406(b), DE 30, is GRANTED. The
Court GRANTS Counsel's petition for §406(b) fees in
the amount of $12, 645.00. The Court ORDERS that payment by
the Commissioner in the amount of $12, 645.00 be paid
directly to Steven Parkman in accordance with the agreement
signed by Plaintiff. The Court further ORDERS Attorney
Parkman to REFUND Plaintiff $6, 278.73, which represents the
amount of the EAJA award already paid to Attorney Parkman and
now credited to Plaintiff.