United States District Court, D. South Carolina
REPORT AND RECOMMENDATION
Bristow Marchant United States Magistrate Judge
a social security case filed by the Plaintiff. By Order filed
March 10, 2016, the decision of the Commissioner in this case
was reversed and the case was remanded for further
proceedings. After a supplemental hearing before the ALJ, the
ALJ issued a fully favorable decision. On April 6, 2016, the
Commissioner issued a Notice of Award for Plaintiff
indicating her past due benefits and issued a subsequent
Notice of Award for Plaintiff's dependent children
indicating their past due benefits on July 14, 2016.
30, 2016, the Honorable Bruce Howe Hendricks, United States
District Judge, awarded Plaintiff attorney fees under the
Equal Access to Justice Act (“EAJA”).
Plaintiff's counsel has now filed a petition for approval
of attorney's fees in this Social Security disability
case pursuant to 42 U.S.C. § 406(b)(1)(A) in the amount
of $43, 221.50, which represents 25% of the past due benefits
for the Plaintiff and her children. This motion has been
referred to the undersigned. As the parties have not
consented, a Report and Recommendation is being entered for
consideration by the District Judge. See Pacel Corp. V.F.
Kay Calkins, 325 Fed.Appx. 202 (4th Cir. May 11, 2009)
[discussing attorney fee order as being a dispositive order];
McConnell v. ABC-Amega, Inc., 338 Fed.Appx. 24 (2d
Cir.2009) [attorney fees motions are dispositive for purposes
of Rule 72]; Rajaratnam v. Moyer, 47 F.3d 922,
923-24 (7th Cir.1995) [holding that the denial of an
application for attorney fees should be considered
dispositive for purposes of § 636(b)(1)(A)]; Massey
v. City of Ferndale, 7 F.3d 506, 509
(6th Cir. 1993)[discussing Magistrate Judge's
lack of authority to enter an order on motion for
attorneys' fees]. See also, Order (Court Docket
counsel seeks approval of this fee pursuant to 42 U.S.C.
§ 406(b), which 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).
counsel and Defendant also agree that any attorney fees
awarded under § 406(b) are subject to offset by the
previous EAJA award, and that Plaintiff's counsel is
required to refund to the Plaintiff the lesser of either his
EAJA or § 406(b) award.
contingency fee requested in this case is provided for by the
contingency fee agreement [see Plaintiff's
Exhibit A] and is at the statutory ceiling for attorney fees
in social security cases of 25% of the past-due benefits.
Gisbrecht v. Barnhart, 535 U.S. 789, 807 (2002).
Plaintiff's counsel contends that a fee award of $43,
221.50 equates to an hourly rate of $819.36 based on the time
records submitted. However, these time records include and do
not distinguish between paralegal time (33 hours) and
attorney time (19.75 hours). There is no authority from the
Fourth Circuit regarding how paralegal work should be
compensated, if at all, under 42 U.S.C. § 406(b). The
Defendant points out that two courts in this district have
modified fee awards in cases where substantial portions of
the federal court work was performed by paralegals (among
other considerations), and that courts from other districts
that have addressed this issue have reached varying opinions
as to whether or not time expended by a paralegal is
separately considered or whether it is expected to be
included in the overhead. See Memorandum in Response
to Plaintiff's Motion for Attorney Fees, p. 4, citing
Smith v. Astrue, No. 06-883, 2009 WL 649192, at * 3
(C.D.Cal. Mar. 9, 2009)[reasoning that fees may be awarded
for paralegal work under 42 U.S.C. § 406(b) when the
paralegal performs work that would otherwise be handled by an
attorney and that are ordinarily billed separately to the
client]; Yarnevic v. Apfel, 359 F.Supp.2d 1363,
1365-1366 (N.D.Ga. 2005)[concluding that not including
paralegal fees would amount to a windfall to the plaintiff,
and approving an award that amounted to an hourly rate of
almost $650 where counsel was highly experienced and had
obtained significant benefits]; Roark v. Barnhart,
221 F.Supp.2d 1020, 1026 (W.D.Mo. 2002)[declining to include
paralegal time, which comprised over half of the time spent
in the case, in the section 406(b) award because it had been
compensated in the EAJA award].
noted, the two cases from this district which have dealt with
this issue modified the amount of the fees requested. See
Dixon v. Colvin, No. 12-3625, 2016 WL 55275, at * 2
(D.S.C. Jan. 5, 2016)[Finding that the “issue is not
whether paralegal time is compensable, but whether the
contingency agreement yields a reasonable fee
amount.”]; Graham-Willis v. Colvin, No.
12-2489, 2015 WL 4068597, at **3-4 (D.S.C. July 1,
2015)[Same; and finding the requested fee of $23, 889.70 to
be improper “in consideration of the large amount of
paralegal time spent on the case” and other factors;
reducing fee to $20, 075.00]. It is noted, however, that in
Dixon the award was modified to equate to $1, 000
per hour, which exceeds the hourly amount requested in this
Defendant argues that the amount of attorney fees requested
in this case is excessive, and should be reduced to an amount
that reasonably compensates Plaintiff's counsel and his
paralegals for their work before this Court. See
Memorandum in Response, p. 1. Since the fee requested in this
case does not exceed the statutory maximum, the following
factors must be examined to determine if the fee should be
reduced: (1) whether the fee is out of line with the
character of the representation and the results . . .
achieved; (2) whether counsel's delay caused past-due
benefits to accumulate during the pendency of the case in
court; or (3) whether past-due benefits are large in
comparison to the amount of time counsel spent on this case.
Mudd v. Barnhardt, 418 F.3d 424, 428 (4th
Cir. 2005); Gisbrecht, 535 U.S. at 808.
undersigned has reviewed Plaintiff's counsel's
extensive experience in this area and the high quality of
representation in this case, and notes the consideration of
benefits obtained for the Plaintiff and her children as a
result of this representation. Further, while Plaintiff's
counsel makes no argument that he is entitled to any portion
of future benefits, the value of the case in all likelihood
will include significate future benefits to the Plaintiff,
who has potential lifetime preretirement
benefits. The undersigned also notes that counsel
has not caused any delay which resulted in the accumulation
of the past-due benefits during the pendency of this
case. Additionally, although a fee of $43,
221.50, which equated to an hourly rate of $819.36 (if
attorney and nonattorney time is combined) is generous, it is
not out of line with what other courts in this district and
circuit have found to be reasonable. Addison v.
Colvin, No. 13-2628-BM (filed Sept. 8, 2016) [awarding
$34, 485.00, which equates to an hourly rate of $1, 014.26];
Ladson v. Colvin, No. 11-848-PJG (filed August 16,
2016)[awarding $51, 755.48 in attorney fees which equated to
an hourly rate of $1, 176.26]; Crider v. Colvin, No.
13-489, 2016 WL 3997374 (D.S.C. July 26, 2016)[Reducing
requested § 406(b) fees to equate to $1, 000 hourly
rate]; Boulware v. Colvin, 13-3597, 2016 WL 70821,
at * 2 (D.S.C. Jan. 6, 2016)[reducing requested fee under
§ 406(b) to $28, 250, “which represents a generous
effective hourly rate of $1, 000"]; Dixon v.
Colvin, No. 12-3625, 2016 WL 55275, at * 3 (D.S.C. Jan.
5, 2016)[reducing requested fee award to $28, 500 which
represented an effective hourly rate of $1, 000]; Duvall
v. Colvin, No. 11-577, 2013 WL 5506081, at * 1 (D.S.C.
Sept. 30, 2013)[finding that hourly rate of $972.00 was
generous, but reasonable]; see also Claypool v.
Barnhardt, 294 F.Supp.2d 829, 833 (W.D.W.Va.
2003)[approving contingency fee amount under § 406(b)
which equated to an hourly rate of $1, 433.12].
of only the attorney hours of 19.75 would result in an hourly
fee of $2, 188.00, exceeding the effective hourly rates
allowed by other courts in this District under Mudd
and Gisbrecht. Accordingly, this Court has examined
the nature of the work performed by the paralegal in this
case to determine whether the fee requested is reasonable.
Plaintiff's detailed initial brief of 39 pages,
Plaintiff's response brief of 12 pages, and
Plaintiff's objection brief of 20 pages to the Report and
Recommendation which recommended affirming the
Commissioner's decision, were all drafted by the
paralegal in this case. The record before the Court further
indicates that the paralegal spent significant time on purely
legal issues which would be allowed to be billed for
attorneys, and that none of the duties listed in the
paralegal's activities indicate purely clerical tasks.
See Court Docket No. 28-3. While counsel reviewed
and edited the briefs and performed research prior to filing
the objections to the Report and Recommendation, the
undersigned does not find that the combined time spent was
unreasonable based on the issues and briefs in this case.
also noted that counsel has represented the Plaintiff for
almost 8 years. See Plaintiff's Exhibit A. While
counsel does not seek compensation in the current motion for
time spent before the Agency, counsel does point out that he
represented Plaintiff in her 2008-2010 appeal to the Appeals
Council, after a first appeal to the District Court where he
represented her in a hearing, followed by representation at
an appeal to the Appeals Counsel, a second appeal to and
remand from the District Court, and in a 2015-2016 second
hearing. See Plaintiff's Reply Brief, p. 2, n.
1. Counsel represents to the Court that he has not petitioned
for a fee for all of the administrative work he performed,
and that he does not intend to petition for a fee if the
requested fee in this motion is approved in its entirety.
Id. The undersigned finds that it is proper to
consider these matters to the extent that they reflect on the
complexity and difficulty of the issues in this case and the
skills required to ultimately obtain a successful result.
Mudd, 418 F.3d at 428-429.
review of the Petition, and based upon a review of the facts
in this case, the parties' arguments, and the relevant
case law, all as is discussed hereinabove, the undersigned
recommends granting the Plaintiffs motion for attorneys fees
under 42 U.S.C. § 406(b)(1) in the amount of $43,
221.50.Cf. Dixon, 2016 WL 55275
at **2-3 [Where Court awarded as a reasonable fee $28, 500
which equated to $1, 000 ...