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McGraw v. Commissioner of Social Security

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

November 9, 2018

LONNIE MCGRAW, JR., Plaintiff,
COMMISSIONER OF SOCIAL SECURITY, sued as Nancy A. Berryhill, Acting Commissioner of Social Security,[1] Defendant.


          Susan Collins, United States Magistrate Judge.

         Plaintiff Lonnie McGraw, Jr., brought this suit to contest a denial of disability benefits by Defendant Commissioner of Social Security (“Commissioner”). (DE 1). On February 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 21).

         McGraw's attorney, Adriana 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 $9, 033.50 for her representation of McGraw in federal court. (DE 28). The Commissioner filed a response indicating that she does not oppose the motion (DE 31), and thus, the motion is ripe for ruling. For the following reasons, de la Torre's motion for attorney fees will be GRANTED, subject to an offset explained herein that will reduce her fee to $2, 754.50.

         A. Factual and Procedural Background

         On March 15, 2016, de la Torre entered into a contingent fee agreement with McGraw for her representation of McGraw in federal court.[2] (DE 28-2). The agreement provided that de la Torre was “entitled to a fee equal to the lesser of: (1) twenty-five percent (25%) of the past-due benefits owed to [McGraw] and [his] dependents, if applicable; or (2) the maximum amount set by the [Commissioner] pursuant to Section 26 of the Social Security Act . . . .” (DE 28-2).

         On March 25, 2016, McGraw filed the instant action with this Court, appealing the Commissioner's denial of his application for disability benefits. (DE 1). On February 27, 2017, the Commissioner filed an agreed motion to reverse and remand McGraw's case to the Commissioner. (DE 20). On February 28, 2017, the Court granted the Commissioner's motion, and the case was remanded to the Commissioner for further proceedings. (DE 21; DE 22).

         On March 29, 2017, McGraw and the Commissioner filed a joint motion for attorney fees under the Equal Access to Justice Act (“EAJA”), 28 U.S.C. § 2412, seeking payment for the hours that de la Torre spent advocating McGraw's claim in federal court. (DE 23). Pursuant to the parties' subsequent stipulation, the Court granted McGraw an EAJA fee award of $6, 279. (DE 24-DE 26).

         On September 11, 2018, the Commissioner sent an “Important Information” notice explaining that the Commissioner had withheld 25% of McGraw's past-due benefits, that is, $9, 033.50, to pay McGraw's attorney. (DE 28-1). Less than a month later, that is, October 3, 2018, de la Torre filed the instant motion seeking fees under § 406(b) in the amount of $9, 033.50 for the 34.5 hours she spent advocating McGraw's appeal in federal court. (DE 28; DE 29).

         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 agreements. Id. 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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