United States District Court, N.D. Indiana, South Bend Division
OPINION AND ORDER
P. SIMON, JUDGE
matter is before me on Plaintiff's counsel's Motion
for Authorization of Attorney's Fees Pursuant to 42
U.S.C. § 406(b), which seeks an award of attorney's
fees in the amount of $2, 942.50, 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 his
case to this Court on September 14, 2015. [DE 1.] Plaintiff
was represented by Attorneys Joseph Sellers and Deborah
Spector for purposes of proceedings in this Court. On
December 1, 2016, I entered an opinion and order reversing
the Commissioner's decision and remanding for further
proceedings. [DE 20.] On March 20, 2017, I ordered payment of
attorney's fees under the Equal Access to Justice Act, 28
U.S.C. § 2412, in the amount of $4, 700.00 to
Plaintiff's attorney. [DE 23.]
remand from this Court, the Commissioner issued a partially
favorable decision allowing Plaintiff's claim. [DE 26-1.]
Plaintiff, who was represented by a different attorney for
the administrative proceedings, then received a Notice of
Award (“NOA”) from the Commissioner finding that
the Plaintiff was due $54, 470.00 in total past-due benefits.
[DE 26-2 at 5.] Twenty-five percent of the award, or $13,
642.50, has been withheld for the payment of attorney's
fees. A fee of $6, 000 will be paid to the attorney who
represented Plaintiff before the Commissioner on remand,
pursuant to a fee agreement. [DE 26-2 at 5.] This leaves $7,
642.50 for the remainder of the attorney's fees.
and Attorneys Seller and Spector entered into a fee agreement
in which they agreed upon a fee of 25% of past-due benefits
recovered would be paid to the attorneys for legal services
in the District Court. [DE 26-3.] They now request approval
of a fee in the amount of $2, 942.50, which represents the
rest of the amount available for legal fees minus the already
received $4, 700 in EAJA fees. The Commissioner does not
oppose their motion.
206(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
206(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 25% contingency fee agreement with
his attorneys. [DE 26-3.] Plaintiff was awarded past due
benefits in the amount of $54, 570.00. Twenty-five percent of
the award totals $13, 642.50, of which $6, 000.00 will be
paid to Plaintiff's attorney for the administrative
proceedings. Attorneys Seller and Spector now seek $2, 942.50
(which is the rest of the money available for attorney's
fees minus the EAJA funds the attorneys have already
received). This amount is reasonable. Attorneys Sellers and
Spector's representation was not substandard. On the
contrary, counsel secured a remand and reversal of the
original administrative decision resulting in the Plaintiff
receiving a favorable decision and an award of retroactive
addition, 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 $2, 942.50 (or $7, 642.50 including EAJA
fees) 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).
Plaintiff's counsel achieved the result his client sought
in filing the suit and should be properly compensated for his
work. The Defendant Commissioner of Social Security does not
object to this fee request. [DE 26.]
Sellers and Spector have already has received $4, 700.00 in
EAJA fees. While fee awards may be made under both Section
206 and the EAJA, the attorney must refund to the claimant
the amount of the smaller fee. Gisbrecht, 535 U.S.
at 796. However, they already accounted for this and have
adjusted their request for attorney's fees accordingly.
Therefore, they are not required to refund the EAJA fees
counsel's Motion for an Award of Attorney Fees Under 42
U.S.C. § 406(b), DE 26, is GRANTED. The
Court GRANTS Counsel's petition for
Section 206(b) fees in the amount of $2, 942.50. The Court
ORDERS that payment by the Commissioner in
the amount of $2, 942.50 be paid directly to Joseph Sellers
and Deborah Spector in accordance with the agreement signed