United States District Court, N.D. Texas, Dallas Division
TINCY R. B.M., Plaintiff,
ANDREW SAUL, Acting Commissioner of Social Security, Defendant.
MEMORANDUM OPINION AND ORDER
L. HORAN UNITED STATES MAGISTRATE JUDGE
has filed a Motion for Award of Attorney Fees Under 406(b) of
the Social Security Act. See Dkt. No. 23; see
also Dkt. Nos. 24 & 25. For the reasons explained
below, the Court GRANTS the motion.
March 31, 2017, Plaintiff Tincy R. B.M. filed a complaint
seeking reversal and remand of the Acting Commissioner of
Social Security's (“Commissioner”) decision
denying her claim for disability benefits under Title II of
the Social Security Act. See Dkt. No. 1. On October
3, 2017, the Court reversed and remanded the case to the
Commissioner for further proceedings. See Dkt. Nos.
19 & 20. Plaintiff then moved for, and was awarded,
attorney's fees under the Equal Access to Justice Act
(“EAJA”) in the amount of $6, 944.40.
See Dkt. Nos. 21 & 22.
remand, the Commissioner rendered a decision in favor of
Plaintiff and awarded disability benefits of somewhat more
than $66, 000. See Dkt. No. 24 at 1. As provided by
a contingency fee agreement, Plaintiff now seeks approval
under Section 406(b) of the Social Security Act to pay her
attorney fees in the amount of $10, 647.38 from the $16,
647.38 withheld from Plaintiff's past-due benefits.
See Dkt. No. 23 & 24. The Commission timely
filed a response, see Dkt. No. 26, and the motion is
now ripe for decision.
Standards and Analysis
406(a) and 406(b) of the Social Security Act provide for the
discretionary award of attorney's fees out of the
past-due benefits recovered by a successful claimant in a
Social Security action.” Murkeldove v. Astrue,
635 F.3d 784, 787 (5th Cir. 2011). While Section 406(a)
governs the award of attorneys' fees for representing a
claimant in administrative proceedings, Section 406(b)
governs the award of attorneys' fees for representing a
claimant in court. See Gisbrecht v. Barnhart, 535
U.S. 789, 794 (2002). Section 406(b) provides:
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....
42 U.S.C. § 406(b)(1)(A); see also Murkeldove,
635 F.3d at 788 (citing Gisbrecht, 535 U.S. at 800);
accord Jackson v. Astrue, 705 F.3d 527, 531 (5th
Cir. 2013) (holding that “§ 406(b) fees are
authorized in cases where an attorney obtains a favorable
decision on remand”).
fee agreements in Social Security cases are unenforceable to
the extent that they provide for fees exceeding 25% of
past-due benefits. See Gisbrecht, 535 U.S. at 807.
Even when contingency fee agreements are within the statutory
ceiling, Section “406(b) calls for court review of such
arrangements as an independent check, to assure that they
yield reasonable results in particular cases.”
Commissioner has declined to assert a position on the
reasonableness of Plaintiff's fee request on the ground
that she is not the true party in interest but notes that
“[c]ontrolling authority directs the Court to resolve
the question of whether Mr. Osterhout's requested fee is
reasonable.” See Dkt. No. 26 at 1, 3. As the
United States Court of Appeals for the Fifth Circuit has
noted, the Commissioner has no direct financial stake in the
fee determination; rather, her role resembles that of a
“trustee” for the claimant. See Jeter v.
Astrue, 622 F.3d 371, 374 n.1 (5th Cir.2010) (citing
Gisbrecht, 535 U.S. at 798 n.6). Seeking a
Court's review of the reasonableness of the fees sought
is consistent with this role.
Commissioner notes that Plaintiff's attorney, Karl
Osterhout, “seeks an award of $10, 647.38 from the $16,
647.38 withheld from Plaintiff's past-due benefits as
attorney's fees pursuant to 42 U.S.C. §
406(b)” and that “Mr.Osterhout's requested
fee does not appear to be unreasonable, ” where
“[b]ased on the 44.3 hours of court-related
representation claimed in Plaintiff's EAJA petition, the
requested § 406(b) award of $10, 647.38 represents an
hourly rate of $375.79 ($16, 647.38 divided by 44.3).”
Dkt. No. 26 at 1, 4; see also Id. at 5 (noting that
“the Commissioner is not empowered to stipulate as to
counsel's requested fee, and in this case does not
independently question the reasonableness of the requested
fee”). Acknowledging that Mr. Osterhout already
received $6, 000 from the agency in connection with the
administrative level case, the Commissioner submits that the
proposed amount “is not excessive on its face when
considered as a lodestar.” Dkt. No. 26 at 4.
reasonableness of attorneys' fees awarded pursuant to a
fee-shifting statute is generally determined by using the
lodestar method. See Id. Noting that Section 406(b)
is not a fee-shifting statute, however, the Supreme Court has
“explicitly rejected” the use of the lodestar
method as the “starting point” in determining the
reasonableness of a fee under this statute.
Gisbrecht, 535 U.S. at 801. Instead, “lower
courts [are] to give a contingency fee agreement
‘primacy, '” although this will “in
some instances result in an excessively high fee
award.” Jeter, 622 F.3d at 379.
Gisbrecht acknowledged that, “[i]f the
benefits [resulting from a contingency fee agreement] are
large in comparison to the amount of time counsel spent on
the case, a downward adjustment is ... in order [to disallow
windfalls for lawyers].” 535 U.S. at 808. The Fifth
Circuit has interpreted this language to mean that courts may
still employ the lodestar method in determining whether a
contingency fee constitutes a windfall but only if they
“articulate additional factors demonstrating that the
excessively high fee would result in an unearned
advantage.” Jeter, 622 F.3d at 379. For
instance, a court may consider a reasonable hourly rate in
its “windfall” assessment, “so long as this
mathematical calculation is accompanied by consideration of
whether an attorney's success is attributable to his own
work or instead to some unearned advantage for which it would
not be reasonable to compensate him.” Id.
Fifth Circuit has not prescribed an exhaustive list of
factors to consider in determining whether a fee award is
unearned. It has noted with approval several factors
considered by lower courts, including “risk of loss in
the representation, experience of the attorney, percentage of
the past-due benefits the fee constitutes, value of the case
to a claimant, degree of difficulty, and whether the client
consents to the requested fee.” Id. at 381-82
(citing Brannen v. Barnhart, No. 1:99-CV-325, 2004
WL 1737443, at *5 (E.D. Tex. July 22, ...