United States District Court, N.D. Indiana, Fort Wayne Division
REX E. DERROW Plaintiff,
NANCY A. BERRYHILL, Acting Commissioner of Social Security, Defendant.
OPINION AND ORDER
William C. Lee, Judge
filed his application for disability insurance benefits in
October of 2012, alleging disability beginning November 15,
2011 (Tr. 155-161). Plaintiff was denied at initial
consideration and reconsideration (Tr. 74-106 and 108-110). A
hearing was held in February of 2014, and Plaintiff was
denied benefits (Tr. 30-73). Plaintiff was represented at the
hearing by Attorney Andrew Kruse (Tr. 30- 73). After a
Request for Review, the Appeals Council denied review (Tr.
1-6). In August of 2015, Plaintiff filed a complaint in this
Court. In May of 2016 this Court reversed and remanded this
case to the Social Security Administration.
requested $5, 443.50 for EAJA fees for 28.50 hours of work in
federal court at a rate of $191.00 per hour. The Court
granted EAJA fees in that amount.
remand, Andrew Kruse represented Plaintiff. Plaintiff was
awarded benefits beginning in August of 2011, and the total
back benefits were $79, 747.80.
Kruse was awarded $6.000.00 for representation before the
Social Security Administration. There remains $13, 936.95 in
back benefits withheld for attorney fees.
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. 42 U.S.C. § 406(a).
Section 406(b) governs attorney fees for litigation for
benefits under Title II of the Social Security Act such as
Disability Insurance Benefits, 42 U.S.C. §§ 416(I),
423, and not litigation for benefits under Title XVI of the
Social Security Act, namely, Supplemental Security Income, 42
U.S.C. §§ 1382, 1382a. 42 U.S.C. § 406(b).
There is no provision of the Social Security Act for attorney
fees for litigation of Title XVI claims. Thus, a federal
court has no authority to award or deny attorney fees paid by
a Title XVI plaintiff to his or her attorney for
representation in federal court. See Bowen v.
Galbreath, 485 U.S. 74 (1988).
406(b)(1) provides in part:
Whenever a court renders a judgment favorable to a claimant
under this subchapter [i.e., Title II' 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). The statute thus limits 406(b)
awards to cases in which a Title II plaintiff actually
receives past due benefits as a result of litigation, limits
awards to at most 25% of past due benefits, and requires a
“reasonable” fee. Id.;
Gisbrecht, 122 S.Ct. at 1828 & n.15. Section
406(b)(2) makes it a misdemeanor to charge, demand, receive,
or collect an attorney fee from a Title II plaintiff other
than allowed by section 406(b)(1). 42 U.S.C. §
Gisbrecht method of determining attorney fees begins
by focusing on the 42 U.S.C. § 406(b) request in light
of the contract between a plaintiff and his or her attorney.
Gisbrecht, 122 S.Ct. at 1827-28. A contingent-fee
agreement is the “primary means by which fees are set
for successfully representing Social Security benefits
claimants in court.” Id. at 1828. The
Gisbrecht Court thus resolved the split in the
Circuits in favor of those Circuits giving
“primacy” to “lawful attorney-client fee
agreements.” Id. at 1820; see also
Id. at 1828-29 (citing with favor Wells v.
Sullivan, 907 F.2d 367 (2d Cir. 1990); Rodriquez v.
Bowen, 865 F.2d 739 (6th Cir. 1989); McGuire v.
Sullivan, 873 F.2d 974 (7th Cir. 1989)).
the Gisbrecht method, a court must ensure that any
42 U.S.C. § 406(b) request is consistent with the
contingent-fee agreement between the plaintiff and his or her
attorney, and that the request is within the statutory
maximum of 25% of past due benefits. Id. & n.15.
The contingent-fee agreement will reflect the necessary
contingent nature of a 42 U.S.C. § 406(b) fee and the
plaintiff's corresponding willingness to pay his or her
attorney more for the attorney to accept the risk of loss.
Gisbrecht method does not end with an examination of
the 42 U.S.C. § 406(b) request in light of the actual
contract between the plaintiff and the attorney.
Gisbrecht, 122 S.Ct. at 1828-29. The attorney
seeking a fee has the burden to prove that the fee request is
reasonable. Id. at 1828 & n.17. A court must
provide an “independent check” to
“assure” that the fee requested is reasonable in
each particular case. Id.
present case, Plaintiff contracted with his attorney to pay
25% of past due benefits. Plaintiff received $79, 747.80 as
past due benefits. Plaintiff's attorney has now moved the
Court to award $13, 936.95, which is 25% of the past due
benefits less the amount of the § 406(a) fee as called
for under the contingent-fee agreement. Therefore, the
request is not only with the statutory maximum of 25% of
past-due benefits but is significantly less than Plaintiff
contracted to pay.
attorney contends, and the Commissioner does not dispute,
that the requested fee of $13, 936.95 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 ...