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Smith v. Commissioner of Social Security

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

January 9, 2020

SUSAN A. SMITH, Plaintiff,
v.
COMMISSIONER OF SOCIAL SECURITY, sued as Andrew Saul, Commissioner of Social Security, [1] Defendant.

          OPINION AND ORDER

          Susan Collins United States Magistrate Judge

         Plaintiff Susan A. Smith brought this suit to contest a denial of disability benefits by Defendant Commissioner of Social Security (“Commissioner”). (ECF 1). On August 22, 2018, this Court entered an Opinion and Order that reversed the Commissioner's denial of benefits and remanded the case for further proceedings. (ECF 19).

         Smith's counsel, Barry A. Schultz (“Counsel”), now moves pursuant to 42 U.S.C. § 406(b) for the Court's authorization of attorney fees in the amount of $14, 106.63, less an offset of $9, 919.70 for previously awarded attorney fees, for his representation of Smith in federal court. (ECF 24). The Commissioner filed a response indicating that he neither supports nor opposes the motion (ECF 25); therefore, the motion is ripe for ruling. For the following reasons, the motion for attorney fees will be GRANTED.

         A. Factual and Procedural Background

         On January 13, 2017, Counsel entered into a Retainer and Fee Agreement for Federal Court Representation (the “Fee Agreement”) with Smith for his representation of Smith in federal court.[2] (ECF 24-4). The Fee Agreement provides that Counsel will receive twenty-five percent of any past due benefits awarded to Smith and her family in the event her disability appeal is successful. (Id.).

         On January 17, 2017, Smith filed the instant action in this Court, appealing the Commissioner's denial of her application for disability benefits. (ECF 1). On August 22, 2018, this Court entered an Opinion and Order reversing the Commissioner's final decision and remanding the case to the Commissioner for further proceedings. (ECF 19).

         On November 16, 2018, Smith filed an agreed motion for an award of attorney fees under the Equal Access to Justice Act (“EAJA”), 28 U.S.C. § 2412, in which Smith and the Commissioner stipulated to the amount of $9, 919.70 for the 51.6 hours that Counsel spent advocating Smith's claim in federal court. (ECF 22, 22-1). The Court then granted the stipulated motion, ordering the Commissioner to pay the EAJA fee award of $9, 919.70 to Smith. (ECF 23).

         The Commissioner sent a notice of award to Smith on October 26, 2019, informing that she was entitled to disability benefits beginning July 2012, resulting in past-due benefits in the amount of $70, 352.52, and auxiliary benefits to her children. (ECF 24 at 2; ECF 24-1; ECF 24-2). On November 27, 2019, Counsel filed the instant motion, together with exhibits, seeking fees under § 406(b) in the amount of $14, 106.63 for the 51.6 hours Counsel spent advocating Smith's appeal in federal court. (ECF 24; ECF 24-1 to 24-5). Counsel further acknowledges that the $9, 919.70 previously awarded EAJA fee award should be offset from the requested § 406(b) award of $14, 106.63. (ECF 24 at 2).

         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. Id. 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 795.

         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. This twenty-five percent cap applies only to fees for court representation and not to the aggregate fees awarded under §§ 406(a) and (b). Culbertson v. Berryhill, 139 S.Ct. 517, 523 (2018).

         Section § 406(b) has been harmonized with the EAJA. Gisbrecht, 535 U.S. at 796. 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, as an EAJA award “offsets” an award under § 406(b). Id. at 797.

         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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