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Michael K. v. Berryhill

United States District Court, S.D. Indiana, Indianapolis Division

March 26, 2019

Michael K., Plaintiff,
Nancy Berryhill, Acting Commissioner of the Social Security Administration, Defendant.


          Hon. Jane Magnus-Stinson, Chief Judge

         Plaintiff Michael K. applied for disability insurance benefits and supplemental security income from the Social Security Administration (“SSA”), and his applications were initially denied. An Administrative Law Judge (“ALJ”) also concluded that Michael K. was not entitled to receive disability benefits or supplemental security income, and the Appeals Council denied review of that decision as well. Michael K. then initiated this action, asking the Court to review the denial of benefits pursuant to 42 U.S.C. § 405(g) and 42 U.S.C. § 1383(c). On March 27, 2017, the Court vacated the ALJ's decision denying Michael K. benefits and remanded the matter for further proceedings. The SSA then reviewed its decision and awarded Michael K. $28, 109.52 in back pay. [Filing No. 32-3.]

         Michael K. then filed a Motion for Attorney's Fees, in which he argued that $8, 075.75 in attorneys' fees were being held by the “payment center, ” and requested that the fees be paid to his attorneys, Stewart & Stewart. [Filing No. 28.] The Court denied Michael K.'s motion, noting that Michael K. had failed to provide a copy of his award letter detailing either the amount of back pay due or the attorneys' fees certified by the Commissioner, a copy of his fee arrangement with counsel, or an itemized list of time spent that distinguishes between work done before this Court and that done before the administrative agency. [Filing No. 31.] The Court denied Michael K.'s motion without prejudice to refiling it in a manner that cured the deficiencies noted. [Filing No. 31.] Michael K. has now filed an Amended Motion for Attorney's Fee, with some of the requested evidentiary support, and the motion is ripe for the Court's consideration. [Filing No. 32.]


         Standard of Review

          The award of attorneys' fees for representation of disability claimants is governed by three statutes - 42 U.S.C. § 406(a), the Equal Access to Justice Act (the “EAJA”) (28 U.S.C. § 2412), and 42 U.S.C. § 406(b). First, Section 406(a) governs the award of attorneys' fees for legal services provided in connection with an administrative claim before the SSA, and fees can be awarded either through the SSA's approval of a written fee agreement between the claimant and the attorney, or based on the SSA's approval of a fee petition made by the attorney. 42 U.S.C. § 406(a)(2). A written fee agreement under § 406(a) can provide for a fee of no more than the lesser of 25% of the back benefits or $6, 000. 42 U.S.C. § 406(a)(2)(A)(i).

         Second, the Equal Access to Justice Act (“EAJA”) entitles a party who prevails against the United States to recover attorneys' fees if the Government's position in the litigation was not “substantially justified.” 28 U.S.C. § 2412(d)(1)(A). An application for fees under the EAJA must be made within thirty days of the final judgment. 28 U.S.C. § 2412(d)(1)(B).

         Finally, 42 U.S.C. § 406(b) governs the award of attorneys' fees when a claimant receives a favorable disability determination from the SSA on remand, after a successful federal court review. It provides that:

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….

See Culbertson v. Berryhill, 139 S.Ct. 517, 520 (2019) (explaining that “[42 U.S.C.] § 406(a) governs fees for representation in administrative proceedings; § 406(b) controls fees for representation in court”) (citation and quotation omitted). Section 406(b) is designed “to control, not to displace, fee agreements between Social Security benefits claimants and their counsel.” Gisbrecht v. Barnhart, 535 U.S. 789, 793 (2002).

         The Commissioner may withhold past-due benefits in order to pay fees under either § 406(a) or § 406(b) directly to the attorney. Culbertson, 139 S.Ct. at 520. Because an award under § 406 comes from a claimant's award and not from agency funds, the Commissioner does not have a financial stake in the resolution of the fee motion but “plays a part in the fee determination resembling that of a trustee for the claimant[ ].” Gisbrecht, 535 U.S. at 796 n. 6. Fees awarded under the EAJA come from SSA funds, and not the claimant's award, and are paid to the claimant rather than to his or her attorney. Id. at 796.

         Here, the SSA withheld $14, 075.75 from Michael K.'s past-due benefits after he prevailed on remand from this Court and has already paid Michael K.'s counsel $6, 000 under § 406(a). [Filing No. 33-2 (letter from SSA Assistant Regional Counsel Jason Scoggins stating “[o]n or about May 15, 2018, the Commissioner's processing center withheld $14, 075.75 in past-due Title II benefits for payment of attorney fees. On or about June 13, 2018, the processing center paid $6, 000 (less a statutory user fee) to [Michael K.'s counsel]”).] In his Amended Motion, Michael K. requests payment of the remaining $8, 075.75 to his attorney under § 406(b).



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