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Wells v. Commissioner of Social Security

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

May 30, 2018

KURT A. WELLS, Plaintiff,
COMMISSIONER OF SOCIAL SECURITY, sued as Nancy A. Berryhill, Acting Commissioner of SSA, [1] Defendant.


          Susan Collins, United States Magistrate Judge.

         Plaintiff Kurt A. Wells brought this suit to contest a denial of disability benefits by Defendant Commissioner of Social Security (“Commissioner”). (DE 1). On March 28, 2017, this Court entered an Opinion and Order that reversed the Commissioner's denial of benefits and remanded the case for further proceedings. (DE 29).

         Wells'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 $18, 505.25 for his representation of Wells in federal court. (DE 37). The Commissioner filed a response indicating that she does not oppose the motion (DE 40), 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 explained herein that will reduce his fee to $12, 305.25.

         A. Factual and Procedural Background

         On January 21, 2016, Shull entered into a contingent fee agreement with Wells for his representation of Wells in federal court.[2] (DE 38-2). 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 [Wells's] family and [him] in the event [his] case is won.” (DE 38-2).

         That same day, Wells filed the instant action with this Court, appealing the Commissioner's denial of his application for disability benefits. (DE 1). On March 28, 2017, Wells received a favorable judgment from this Court, and the case was remanded to the Commissioner for further proceedings. (DE 29; DE 30).

         On June 20, 2017, Wells filed a request for attorney fees under the Equal Access to Justice Act (“EAJA”), 28 U.S.C. § 2412, seeking payment for the hours that Shull spent advocating his claim in federal court. (DE 32-DE 34). Pursuant to the parties' subsequent stipulation, the Court granted Wells an EAJA fee award of $6, 200. (DE 35; DE 36).

         On February 12, 2018, the Commissioner sent a notice of award to Wells, explaining that he was entitled to monthly disability benefits beginning October 2012 and past-due benefits in the amount of $98, 021. (DE 38-1 at 6). The notice further explained that the Commissioner had withheld 25 percent of Wells's past-due benefits, that is, $24, 505.25, to pay Wells's attorney and that any remainder after doing so would be sent to Wells. (DE 38-1 at 7).

         Within three months, that is, on May 3, 2018, Shull filed the instant motion seeking fees under § 406(b) in the amount of $18, 505.25 for the 32.6 hours he spent advocating Wells's appeal in federal court. (DE 37).

         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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