United States District Court, N.D. Indiana, South Bend Division
DANNY R. BLANTON, Plaintiff,
NANCY BERRYHILL, Acting Commissioner of Social Security, Defendant.
OPINION AND ORDER
L. Miller, Jr. Judge
Blanton brought this action for judicial review after the
Commissioner of Social Security denied his application for
disability insurance benefits. This court reversed and
remanded the claim for further proceedings. Mr. Blanton
ultimately prevailed and was awarded approximately $62, 989
in past-due benefits. The Social Security Administration
withheld $15, 747.25 (25%) for attorney's fees, and from
that amount, Soultana Myers (who represented Mr. Blanton at
the administrative level) received $6, 000 in fees. Mr.
Shull's motion for authorization of attorney fees under
42 U.S.C. § 406(b) now pends before the court. For the
following reasons, the court grants the motion subject to an
attorney who has successfully represented a claimant in
federal court can receive “a reasonable fee for such
representation, not in excess of 25 percent of the total
past-due benefits to which the claimant is entitled by reason
of such judgment.” 42 U.S.C. § 406(b)(1)(A);
Gisbrecht v. Barnhart, 535 U.S. 789 (2002). The
combination of fees awarded under Sections 406(a) and 406(b)
can't exceed twenty-five percent of the past-due benefits
awarded, Kopulos v. Barnhart, 318 F.Supp.2d 657, 661
(N.D. Ill. 2004), and while fees can be awarded under both
the EAJA and Section 406(b), “an EAJA award offsets an
award under Section 406(b).” Gisbrecht v.
Barnhart, 535 U.S. at 796; see also Talbott v.
Bowen, 832 F.2d 111, 112 (8th Cir. 1987) (“[I]f
the award received under the EAJA . . . is less than the 25%
contingent fee contract based upon back benefits, then
claimant's counsel may collect from the claimant the
difference between the 25% award and the award under the
Shull asks the court to authorize attorney fees in the amount
of $9, 747.25, which represents the difference between his
twenty-five percent contingent fee agreement with Mr. Blanton
($15, 747.25) and fees the Administration had paid to
attorney Soultana Myers under 42 U.S.C.§ 406(a) ($6,
000). The amount is within the parameters of § 406(b)
and the contingent fee agreement between Mr. Shull and Mr.
$9, 747.25 is roughly fifteen percent of Mr. Blanton's
benefit award, the court must determine whether the attorney
fees yielded by that agreement are reasonable. Gisbrecht
v. Barnhart, 535 U.S. at 809. Mr. Shull has more than
thirty years experience in Social Security disability claims
and his practice has been concentrated almost exclusively in
representing Social Security disability claimants. $9, 747.25
equates to an effective rate of $367.13 per hour
($9747.25/26.55), and is reasonable in light of the result
achieved in this case and the contingent nature of the
recovery. Without the greater incentive for attorneys to take
these cases stemming from the potential for an enhanced fee
payment, claimants who have difficult cases and who cannot
afford to guarantee payment might not be able to secure
representation. See McGuire v. Sullivan, 873 F.2d
974, 980 (7th Cir. 1989) (internal citations omitted).
the government hasn't objected to the amount of fees Mr.
Shull is requesting, the government says that Mr. Shull
“significantly delayed” in filing the instant
motion. Neither party presented evidence suggesting that Mr.
Blanton was prejudiced by Mr. Shull's delay, but the
government noted that it might have been prejudiced because
the processing center needs to “devote some additional
time to this manner” as a result of the delay. The
government also says that Mr. Shull has established a pattern
of late filing and cites to at least four cases where the
court addressed the delay.
petition for fees under § 406(b)(1) must be brought
within a reasonable time.” Smith v. Bowen, 815
F.2d 1152, 1156 (7th Cir. 1987). Although this decision was
rendered at a time when Fed.R.Civ.P. 54 imposed no time limit
apart from an implicit requirement of reasonableness, courts
have continued to apply the “reasonable time”
standard when considering § 406(b) requests.
See, e.g., Bassett v. Astrue, 2012
WL 295068, at *2 (C.D. Ill. Feb. 1, 2012) (citing Smith
v. Bowen, 815 F.2d at 1156)).
Shull waited seventeen months after Mr. Blanton's Social
Security award to file this motion. In similar cases in which
Mr. Shull delayed in bringing a section 406(b) motion, this
court has held that a nine-month delay warranted a reduction
of the portion of the attorney's requested award in an
amount equal to the interest on the money rightfully due to
the plaintiff that had been needlessly withheld for an
excessive amount of time. See, e.g., Moore v.
Comm'r of Soc. Sec., 2017 WL 3588066, at *3 (N.D.
Ind. Aug. 21, 2017); Hill v. Comm'r of Soc.
Sec., 2016 WL 2643360, at *5 (N.D. Ind. May 10, 2016)
(holding that a nine-month delay in filing a § 406(b)
request was unreasonable).
Blanton received a letter from the Commissioner on October 8,
2016, which states that she has been withholding the $15,
747.25-the balance of 25 percent of the past-due benefits
payable to Mr. Blanton since July 2013. Mr. Shull filed his
fee request on March 28, 2018. Mr. Shull says that a
reasonable time for filing a 406(b) petition is within the
20-day period set out in the “close out” letter
from the Social Security Administration. Although the
court isn't bound by such a requirement, Mr. Shull says
that the court should adopt that to establish uniformity. In
addition, Mr. Shull says that he will be more prejudiced by
the delay than the government, because Mr. Shull is
responsible for paying a “user fee” when the
Social Security Administration processes a fee payment.
appears that Mr. Shull has created a pattern of delay in
similar cases, and this one is no different. Mr. Shull also
uses the same defense as to why he unduly delayed in filing
the motion. Although the parties believe otherwise, Mr.
Blanton was somewhat prejudiced by Mr. Shull's delay. Mr.
Blanton was awarded benefits in October 2016 and only
received $18, 347 of an anticipated $62, 989. Mr. Shull
waited almost a year and a half to file this motion. The
court also won't consider the twenty-day rule. As Mr.
Shull stated in his reply brief, the rule only affects the
direct payment out of withheld benefits, which isn't the
case here. Even if given the benefit of the twenty-day rule,
Mr. Shull filed the instant motion three months after
receiving the close-out letter. Mr. Shull's request is
within the parameters of § 406(b) but the court will
reduce the amount to account for the prejudice that resulted
to Mr. Blanton because of Mr. Shull's unreasonable delay.
remand to the agency, the court awarded Mr. Shull fees in the
amount of $4, 991.40 pursuant to the Equal Access to Justice
Act, 28 U.S.C. § 2412 [Doc. No. 41]. Mr. Shull never
received the funds because the government seized the entire
fee to pay a federal debt Mr. Blanton owed. Fee awards can be
made under both the Equal Access to Justice Act and §
406(b), but the claimant's attorney must refund the
amount of the smaller fee. Gisbrecht v. Barnhart,
535 U.S. at 796. Mr. Shull was never paid, so a refund
foregoing reasons, the court GRANTS the motion for an award
of attorney's fees under 42 U.S.C. § 406(b) [Doc.
No. 44] and AWARDS fees to plaintiff's attorney Mr.
Joseph Shull in the amount of $9, 747.25, to be paid directly
to the Law offices of Joseph A. Shull, 2200 Lake Ave, Suite
140, Fort Wayne, IN 46805. The court further DIRECTS the
Commissioner to deduct from the portion due to Mr. Shull an
amount equal to the interest on the remaining $9, 747.25 owed
to Mr. Blanton, as calculated pursuant to the statutory
interest rate, beginning January 8, 2017, which is 90 days
after the date of Mr. Blanton's benefit award-through
March 28, 2018, the date this motion was ...