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Hughes v. Commissioner of Social Security

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

May 30, 2018

ROSEMARIE HUGHES, Plaintiff,
v.
COMMISSIONER OF SOCIAL SECURITY, sued as Nancy A. Berryhill, Acting Commissioner of Social Security, [1] Defendant.

          OPINION AND ORDER

          Susan Collins United States Magistrate Judge

         Plaintiff Rosemarie Hughes brought this suit to contest a denial of disability benefits by Defendant Commissioner of Social Security (“Commissioner”). (DE 1). On March 29, 2018, this Court entered an Opinion and Order that reversed the Commissioner's denial of benefits and remanded the case for further proceedings. (DE 19).

         Hughes's attorney, Adriana de la Torre (“Attorney de la Torre”), now moves pursuant to 42 U.S.C. § 406(b) for the Court's authorization of attorney fees in the amount of $16, 765.63 for her representation of Hughes in federal court. (DE 26; DE 27). For the following reasons, Attorney de la Torre's motion for attorney fees will be GRANTED, subject to an offset explained herein that will reduce her fee award to $8, 498.41.

         A. Background

         In July 2018, Attorney de la Torre, on behalf of Hughes, moved for an extension of time to file a motion for attorney's fees under the Equal Access to Justice Act (“EAJA”), 28 U.S.C. § 2412. (DE 21). Attorney de la Torre attached a proposed EAJA petition to the motion in which she requested a total award of $8, 267.22 ($7, 847 in fees and $420.22 in costs). (DE 21-1 at 2). The Court ultimately denied the motion for an extension of time, and Attorney de la Torre did not recover any EAJA fees. (DE 25).

         On March 4, 2019, the Commissioner sent Hughes a “Notice of Award, ” indicating that she was found disabled and entitled to past-due benefits in the amount of $91, 062.50. (DE 26-1). On March 7, 2019, Attorney de la Torre filed a motion pursuant to 42 U.S.C. § 406(b), together with supporting documentation, for the Court's authorization of attorney fees in the amount of $16, 765.63 for her representation of Hughes in federal court. (DE 26).

         The Commissioner filed a response indicating that Attorney de la Torre is entitled to fees under § 406(b), but that the award should be offset by $8, 267.22 (the amount that Attorney de la Torre requested in her proposed EAJA petition). (DE 28). The Commissioner contends that if Attorney de la Torre had timely filed a petition for EAJA fees, then she would have recovered those fees from the Social Security Administration. However, because Attorney de la Torre's attempt to file an EAJA petition was unsuccessful, she now seeks the $8, 267.22 in a § 406(b) award, which is paid out of Hughes's past-due benefits. Therefore, the Commissioner argues, an offset of $8, 267.22 is necessary to prevent an award under § 406(b) from prejudicing Hughes.

         B. Discussion

         1. Reasonableness

         Fees for representing Social Security claimants, both administratively and in federal court, are governed by 42 U.S.C. § 406. Gisbrecht v. Barnhart, 535 U.S. 789, 793-94 (2002). 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, [2] the fees awarded under § 406 are charged against the claimant, not the government. Id. at 796.

         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 . . . .”[3] 42 U.S.C. § 406(b)(1)(A); Gisbrecht, 535 U.S. at 795. This 25 percent cap applies only to fees for court representation and not to the aggregate fees awarded under sections 406(a) and (b). Culbertson v. Berryhill, 139 S.Ct. 517, 523 (2018).

         The Court is required under § 406(b) to review for reasonableness the attorney fees yielded by contingent fee agreements. Gisbrecht, 535 U.S. at 809. The Supreme Court has explained:

Congress has provided one boundary line: Agreements are unenforceable to the extent that they provide for fees exceeding 25 percent of the past-due benefits. Within the 25 percent boundary, . . . the attorney for the successful claimant must show that the fee sought is reasonable for the services rendered. Courts that approach fee determinations by looking first to the contingent-fee agreement, then testing it for reasonableness, have appropriately reduced the ...

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