United States District Court, D. South Carolina, Florence Division
Bryan Harwell United States District Judge
matter is before the Court on Plaintiff’s motion [ECF
#36] for attorney fees under 42 U.S.C. § 406(b)(1).
Plaintiff’s counsel requests an attorney fee award of
$49, 296.00, which represents 25% of the past due benefits
for Plaintiff. Plaintiff’s counsel previously received
an attorney fee award under the Equal Access to Justice Act
(“EAJA”), 42 U.S.C. § 2412, in the amount of
$5, 500.00. Plaintiff’s counsel agrees that any
attorney fees awarded under § 406(b)(1) are subject to
offset by a previous EAJA attorney fee award and the lesser
of the two amounts must be refunded to the plaintiff.
42 U.S.C. § 406(b)(1)(A) provides that “[w]henever
a court renders a judgment favorable to a claimant . . . 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.” 42 U.S.C. §
406(b)(1)(A). In Gisbrecht v. Barnhart, the Supreme
Court held that § 406(b) sets a statutory ceiling for
attorney fees in social security cases of 25 percent of
past-due benefits and calls for court review of contingency
fee agreements to assure that the agreement yields reasonable
results in particular cases. 535 U.S. 789, 807 (2002).
Contingency fee agreements are unenforceable to the extent
that they provide for fees exceeding 25 percent of the
past-due benefits. Gisbrecht, 535 U.S. at 807. When
the contingency fee agreement and requested fee do not exceed
25 percent of the past-due benefits, “the attorney for
the successful claimant must show that the fee sought is
reasonable for the services rendered.” Id.
Even where the requested fee does not exceed 25 percent of
past-due benefits, “a reduction in the contingent fee
may be appropriate when (1) the fee is out of line with the
‘character of the representation and the results
...achieved, ’ (2) counsel’s delay caused
past-due benefits to accumulate ‘during the pendency of
the case in court, ’ or (3) past-due benefits
‘are large in comparison to the amount of time counsel
spent on the case’” (i.e., the
“windfall” factor). Mudd v. Barnhart,
418 F.3d 424, 428 (4th Cir. 2005) (citing Gisbrecht,
535 U.S. at 808).
considering whether plaintiff’s counsel would receive a
“windfall” from the contingency fee agreement,
the Court is mindful of the fact that “contingency fees
provide access to counsel for individuals who would otherwise
have difficulty obtaining representation.” In re
Abrams & Abrams, P.A., 605 F.3d 238, 245 (4th Cir.
2010). As the district court noted in Wilson v.
there are occasions in the practice of representing claimants
where a 25 percent contingent fee agreement is reached
between the claimant and counsel, but no fee is awarded
because of the result achieved in the case. Thus, adherence
to the 25 percent contingent fee allowed by statute in a
successful case such as this one recognizes the realities
facing practitioners representing social security claimants
and sustains those practitioners so as to allow them to
continue to make their services available to other claimants.
622 F.Supp.2d 132, 136-37 (D.Del. 2008); see also
Gisbrecht, 535 U.S. at 804 (recognizing that “the
marketplace for Social Security representation operates
largely on a contingency fee basis”).
does not dispute Plaintiff’s counsel’s
entitlement to an attorney fee but argues that the requested
amount of $49, 296.00 should be reduced to some extent.
Defendant argues that considering the 41.1 hours of attorney
time spent in this case, the requested fee of $49, 296.00
represents an hourly rate of $1, 199.00, and constitutes an
impermissible windfall. Defendant suggests an appropriate fee
award would be $41, 100, which represents an effective hourly
rate of $1, 000.00 per hour. This Court agrees.
and Plaintiff’s counsel entered into a contingency fee
agreement dated February 27, 2013, which provided that if the
Social Security Administration favorably decides
Plaintiff’s claims after an initial denial and
successful appeal, Plaintiff agrees to pay counsel
“twenty-five percent (25%) of all past due benefits
awarded in my case.” [ECF# 36-4]. Plaintiff’s
counsel obtained a successful result for Plaintiff and
obtained in excess of $190, 000.00 in past-due benefits for
her client. There is no indication that counsel caused any
unusual delays in the case. Defendant did not object to the
Magistrate Judge’s Report and Recommendation, which
recommended that the Commissioner’s decision be
reversed and the case remanded. The appeal to district court
was not particularly complex or novel as the issues presented
are fairly common appellate issues in social security cases.
Plaintiff’s counsel has a specialized social security
practice and regularly appears before this Court on social
security appeals. Plaintiff’s counsel achieved an
excellent result for her client and provided thorough and
considering the relatively small amount of time spent on the
case and the lack of novel or complex issues, the Court finds
that Plaintiff’s counsel’s requested fee of $49,
296.00 should be reduced to avoid an impermissible windfall.
The Court finds that Plaintiff’s counsel’s
requested fee should be reduced to $41, 100, which represents
a generous effective hourly rate of $1, 000.00. In light of
counsel’s specialized skill in social security
disability cases and the result achieved in this case, an
attorney fee award of $41, 100.00 with an effective hourly
rate of $1, 000.00 is reasonable and does not amount to a
windfall. The Court notes that other district courts within
the Fourth Circuit have approved contingency fee agreements
that produce similar hourly rate ranges in successful social
security appeals. See, e.g. Duvall v. Colvin, Civil
Action No. 5:11-577-RMG, 2013 WL 5506081, at *1 (D.S.C. Sept.
30, 2013) (finding contingency fee agreement that produced an
effective hourly rate of $972.00 to be reasonable); Brown
v. Barnhart, 270 F.Supp.2d 769, 772 (W.D. Va. 2003)
(approving contingency fee agreement with resulting hourly
rate of $977.00); Melvin v. Colvin, No.
5:10-cv-160-FL, 2013 WL 3340490, at *3 (E.D. N.C. July 2,
2013) (approving contingency fee agreement with resulting
hourly rate of $1, 043.92); Claypool v. Barnhart,
294 F.Supp. 22 829, 833 (S.D.W.Va. 2003) (approving
contingency fee agreement with resulting hourly rate of $1,
foregoing reasons, the Court GRANTS Plaintiff’s motion
[ECF #36] for attorney fees under 42 U.S.C. § 406(b)(1),
as modified herein, in the amount of $41, 100.00.
Plaintiff’s counsel must refund her EAJA fee award of
$5, 500.00 to the Plaintiff.
Plaintiff’s counsel was
previously awarded a lesser amount of fees under the Equal
Access to Justice Act, 28 U.S.C. § 2412
(“EAJA”). [ECF# 35]. “Fee awards may be
made under both [EAJA and § 406(b)], but the
claimant's attorney must refund to the claimant the
amount of the smaller fee . . . up to the point the claimant
receives 100 percent of the past-due benefits.”
Gisbrecht, 535 U.S. at 796 (internal quotation marks
and citation omitted). Accordingly, Plaintiff's counsel
is to ...