Opinion
20-CV-5412 (PGG) (JLC)
01-20-2023
TROY A. WARD, Plaintiff, v. KILOLO KIJAKAZI, Acting Commissioner of Social Security,[1] Defendant.
REPORT & RECOMMENDATION
JAMES L. COTT, UNITED STATES MAGISTRATE JUDGE.
To the Honorable Paul G. Gardephe, United States District Judge:
Following a stipulated remand and the subsequent award of benefits, Troy A. Ward has now moved for approval of attorney's fees pursuant to 42 U.S.C. § 406(b) in this social security case. For the reasons set forth below, I recommend that the motion be granted.
I. BACKGROUND
A. Facts & Procedural History
On December 6, 2016, Ward filed an application for social security disability benefits. Dkt. No. 12, at 11. The Social Security Administration (“SSA”) denied his claim, and Ward requested a hearing before an Administrative Law Judge (“ALJ”). Id. On March 12, 2019, following a hearing, the ALJ denied his claims, and Ward appealed the decision. Id. at 18. The Appeals Council denied Ward's appeal and on July 9, 2020, he retained Eddy Pierre Pierre (“Pierre”) as his counsel. Affirmation of Eddy Pierre Pierre dated December 11, 2022 (“Pierre Aff.”), Dkt. No. 23, Exhibit A, at 2. On July 14, 2020, Ward filed a complaint in federal court. Dkt. No. 1.
On March 30, 2021, Ward filed a motion for judgment on the pleadings and a memorandum in support. Dkt. Nos 13-14. On April 26, the parties agreed to remand the case for further proceedings, Dkt. No. 16, and on April 27, the Court entered an order remanding the case. Dkt No. 17. On July 27, the parties stipulated that the SSA would pay $7,292.53 in attorney's fees under the Equal Access to Justice Act (“EAJA”), 28 U.S.C. § 2412. Dkt. No. 20.
Upon remand, Ward appeared again before an ALJ and on November 9, the ALJ found Ward to be disabled. Pierre Aff. ¶ 10. As part of the retainer agreement, Ward agreed to pay 25% of the past due benefits payable to him as payment to Pierre for legal services. Id. ¶ 6; see also Pierre Aff. Ex. A at 1.
By Notice of Award dated November 13, 2022, the SSA informed Ward that he was entitled to past due benefits. Id. ¶ 14; see also Pierre Aff. Ex. C. In the Notice of Award, the SSA also stated that it withheld $17,770.75 (or 25% of the past due benefits) “to pay [Ward's] representative.” Pierre Aff. Ex. C, at 3.
On December 11, 2022, Ward filed this motion for attorney's fees pursuant to 42 U.S.C. § 406(b). Dkt. No. 21. In his motion papers, Ward seeks a court order approving an attorney's fees award of $17,770.75 for 35.14 attorney hours of work performed. Memorandum of Law in Support of Plaintiff's Motion for Approval of Attorney's Fees (“Pl. Mem.”), Dkt. No. 22 at 4; Pierre Aff. ¶ 13. On December 15, 2022, the Commissioner filed a response to Ward's motion in her limited role “resembling that of a trustee for the claimant[],” and, without taking a position, requested that the Court determine the timeliness and reasonableness of Ward's fee petition. Defendant's Response to Plaintiff's Counsel's Motion For Fees Pursuant to 42 U.S.C. § 406(b) (“Comm'r Resp.”), Dkt. No. 25, at 1 (citing Gisbrecht v. Barnhart, 535 U.S. 789, 798 n.6 (2002)).
II. DISCUSSION
A. Legal Standards
Pursuant to Section 206(b) of the Social Security Act, “[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,” as long as the fee does not exceed “25 percent of the total of the past-due benefits to which the claimant is entitled.” 42 U.S.C. § 406(b)(1)(A). Even if the claimant agreed to a contingency fee arrangement, Section “406(b) calls for court review of such arrangements as an independent check.” Gisbrecht, 535 U.S. at 807. To do so, courts must first determine whether “the contingency percentage is within the 25% cap . . . [and] whether there has been fraud or overreaching in making the agreement.” Dorta v. Saul, No. 18-CV-396 (JLC), 2021 WL 776446, at *1 (S.D.N.Y. Mar. 1, 2021) (quoting Wells v. Sullivan, 907 F.2d 367, 372 (2d Cir. 1990)).
A court must then consider the following factors to determine the reasonableness of a requested award:
1) whether the requested fee is out of line with the “character of the representation and the results the representation achieved”; 2) whether the attorney unreasonably delayed the proceedings in an attempt to increase the accumulation of benefits and thereby increase his own fee; and 3) whether “the benefits awarded are large in comparison to the amount of time counsel spent on the case,” the so-called “windfall” factor.Nieves v. Colvin, No. 13-CV-1439 (WHP) (GWG), 2017 WL 6596613, at *1 (S.D.N.Y. Dec. 26, 2017) (quoting Gisbrecht, 535 U.S. at 808), adopted by 2018 WL 565720 (Jan. 24, 2018); see also Wells, 907 F.2d at 371 (“best indicator of the ‘reasonableness' of a contingency fee in a social security case is the contingency percentage actually negotiated between the attorney and client”). With respect to the third factor - whether a requested fee would be a “windfall” - courts consider several factors, including:
1) whether the attorney's efforts were particularly successful for the plaintiff, 2) whether there is evidence of the effort expended by the attorney demonstrated through pleadings which were not boilerplate and through arguments which involved both real issues of material fact and required legal research, and finally 3) whether the case was handled efficiently due to the attorney's experience in handling social security cases.Dorta, 2021 WL 776446, at *2 (quoting Joslyn v. Barnhart, 389 F.Supp.2d 454, 456-57 (W.D.N.Y. 2005)).
The Second Circuit recently directed that in determining whether a requested fee award is a windfall, a district court must consider more than the lodestar calculation and de facto hourly rate. Fields v. Kijakazi, 24 F.4th 845, 854 (2d Cir. 2022). Instead, a “court's primary focus should be on the reasonableness of the contingency agreement in the context of the particular case.” Id. at 853 (quoting Wells, 907 F.2d at 371). “[E]ven a relatively high hourly rate may be perfectly reasonable, and not a windfall, in the context of any given case.” Id. at 854.
An attorney may receive fee awards under both the EAJA and § 406(b), but where the attorney receives two fee awards for the same work, he must “refun[d] to the claimant the amount of the smaller fee.” Gisbrecht, 535 U.S. at 796 (citation omitted). Notably, § 406(b)'s 25% cap applies only to fees awarded for federal court work and not the aggregate amount of fees under both § 406(a) and § 406(b). See Culbertson v. Berryhill, 139 S.Ct. 517, 522 (2019).
B. Analysis
1. Timeliness
The Second Circuit held in Sinkler v. Berryhill that motions for attorney's fees under § 406(b) are “subject to the fourteen-day filing limitation of Rule 54(d)(2)(B) [of the Federal Rules of Civil Procedure] once a party receives notice of a benefits calculation following a sentence four remand judgment.” 932 F.3d 83, 89 (2d Cir. 2019). However, the Second Circuit also made clear that “district courts are empowered to enlarge that filing period where circumstances warrant,” noting that Rule 54's “fourteen-day limitations period is not absolute.” Id.
Here, the Notice of Award is dated November 13, 2022. Pierre Aff. Ex. C at 1. Pierre does not dispute that the motion for attorney's fees should have been filed by November 27, 2022. Pl. Mem. at 7-8. However, Pierre contends that the delay is a result of the fact that his “office remains somewhat affected by the COVID-19 pandemic,” and that the office “remain[s] limited in [] staff who process mail for timely calendaring of motions.” Id. at 8. A court in this district recently exercised its discretion to enlarge the 14-day filing period as a result of a delay relating to COVID-19. See Marrero v. Comm'r of Soc. Sec., No. 17-CV-2648 (VSB) (BCM), 2022 WL 4774799, at *2 (S.D.N.Y. Oct. 3, 2022) (motion filed “nearly a month after” notice of award issued to plaintiff was deemed timely because delay was result of COVID-19 pandemic). Other courts have reached similar conclusions. See, e.g., Fields v. Saul, No. 19-CV-18 (AJN) (DF), 2022 WL 847299, at *1 (S.D.N.Y. Feb. 18, 2022) (six-day delay explained by conditions created by COVID-19 pandemic), adopted sub nom. Fields v. Comm'r of Soc. Sec., 2022 WL 845749 (Mar. 22, 2022); De Los Santos v. Comm'r of Soc. Sec., No. 18-CV-2113 (NSR) (LMS), 2020 WL 12654676, at *3 (S.D.N.Y. May 14, 2020) (motion filed 11 days late during COVID- 19 pandemic), adopted by 2021 WL 4507554 (Sept. 30, 2021); Williams v. Comm'r of Soc. Sec., 2021 WL 4480536, at *3 (E.D.N.Y. Sept. 30, 2021) (motion filed more than four months after 14-day filing period deemed timely where attorney was working from home and experienced mailing delays). Accordingly, the motion should be considered timely.
Although Pierre reports that he received notice of his award on September 21, 2022, Ward did not receive his notice of award until November 27, 2022. See Pl. Mem. at 8, n.2. Accordingly, Pierre waited until Ward received his notice to confirm the amount being withheld was correct. Id. “[I]t is unclear whether the court in Sinkler intended for the 14-day tolling period to commence when the party to the action receives notice of the damage award or when the party's counsel receives notice.” Almodovar v. Saul, No. 16-CV-7419 (GBD) (SN), 2019 WL 6207784, at *2 (S.D.N.Y. Nov. 21, 2019). The Sinkler decision seems to imply both. Compare Sinkler, 932 F.3d at 85 (“[T]he fourteen-day filing period is tolled until the claimant receives notice of the amount of any benefits award.” (emphasis added)) with id. at 88 (“Once counsel receives notice of the benefits award . . . there is no sound reason not to apply Rule 54(2)(B)'s fourteen-day limitations period ....” (emphasis added)). Whether the tolling period commenced when Pierre received notice or Ward received notice, it is undisputed that the motion for attorney's fees is late.
It would have been preferable if plaintiff had included these facts in his counsel's affirmation, rather than in a memorandum of law, as it is well-settled that “[a]n attorney's unsworn statements in a brief are not evidence.” Kulhawik v. Holder, 571 F.3d 296, 298 (2d Cir. 2009).
2. Reasonableness
In this case each of the reasonableness factors weighs in favor of approving the fee request. As a threshold matter, the requested fee is equal to the 25% negotiated in the contingency fee agreement between Ward and Pierre, and, as the Commissioner notes, there is no evidence of “fraud or overreaching” in reaching the agreement. Wells, 907 F.2d at 372; Comm'r Resp. at 4.
With respect to the quality of representation, Pierre reviewed a 698-page administrative record, was able to successfully negotiate a remand to the SSA, and ultimately secured an award of past due benefits for Ward. See, e.g., Cruz v. Saul, No. 17-CV-3951 (GBD) (JLC), 2020 WL 3965345, at *2 (S.D.N.Y. Jul. 14, 2020) (attorney provided quality representation after reviewing record and securing remand that resulted in award of past due benefits), adopted by 2020 WL 6491692 (Nov. 4, 2020). Moreover, there is nothing in the record to suggest that counsel unreasonably delayed the proceedings.
With respect to whether the requested fees may amount to a “windfall,” Pierre's efforts were “particularly successful” given that he ultimately secured Ward more than $71,000 in past due benefits. See, e.g., Fields, 24 F.4th at 855 (attorneys' efforts were “particularly successful” when claimant received fully favorable decision from SSA and six-figure award of past-due benefits); Cruz, 2020 WL 3965345, at *3 (attorney's efforts were “particularly successful” when more than $25,000 secured for claimant).
While the exact amount of Ward's award does not appear in the record before the Court, the $17,770.25 counsel seeks is 25% of $71,083.
Additionally, Pierre's de facto hourly rate is $505.71 ($17,770.75 / 35.14 hours = $505.71), Pl. Mem. at 4, which “is within the range of effective hourly rates that have previously been deemed reasonable by courts in this Circuit.” Dorta, 2021 WL 776446, at *2 (citations omitted); see also Janes v. Saul, No. 18-CV-5054 (GBD) (SDA), 2020 WL 7029173, at *3 (S.D.N.Y. July 28, 2020) (hourly rate of $690 is not windfall) (collecting cases), adopted sub nom. Janes v. Berryhill, 498 F.Supp.3d 540 (S.D.N.Y. 2020). Furthermore, given his expertise in handling social security cases, see Pierre Aff. ¶ 3, Pierre was able to efficiently negotiate a remand of Ward's case without engaging in extensive briefing and spending numerous hours litigating the case in federal court. Fields, 24 F.4th at 854 (requested fees reasonable when attorneys' “specialization and expertise” allowed them to operate efficiently). Lastly, because contingency agreements like the one here present risks of nonpayment, “any reasonable fee award must take account of that risk.” Nieves, 2017 WL 6596613, at *2 (quoting Wells, 907 F.2d at 371).
3. Return of the EAJA Award
With respect to the EAJA fee award, where a plaintiff's counsel received fees for the same work before a district court under the EAJA and § 406(b), counsel must refund to the plaintiff the amount of the smaller fee. See Gisbrecht, 535 U.S. at 796 (“Congress harmonized fees payable by the Government under EAJA with fees payable under § 406(b) out of the claimant's past-due Social Security benefits in this manner: Fee awards may be made under both prescriptions, but the claimant's attorney must refund to the claimant the amount of the smaller fee.”) (internal quotations and citations omitted). Accordingly, Pierre appropriately agrees to return the amount he is awarded pursuant to the EAJA, should he receive it. Pierre Aff. ¶¶ 11-12.
Pierre was awarded $7,292.53 pursuant to the EAJA; however, subject to the Treasury Offset Program, the award was offset in the amount of $4,146.12. Pierre Aff. ¶¶ 11-12. Further, Pierre stated that at the time of the filing of his affirmation, he had not yet received any award pursuant to the EAJA. Pierre Aff. ¶ 12. Accordingly, he stated that should he receive such an award, the “amount will be refunded to Plaintiff upon [Pierre's] receipt of fees pursuant to 42 U.S.C. 406(b)(1).” Id.
III. CONCLUSION
For these reasons, the Court recommends that the motion be granted.
PROCEDURE FOR FILING OBJECTIONS
Pursuant to 28 U.S.C. § 636(b)(1) and Rule 72(b) of the Federal Rules of Civil Procedure, the parties shall have fourteen (14) days from service of this Report to file written objections. See also Fed.R.Civ.P. 6. Such objections, and any responses to such objections, shall be filed with the Clerk of Court, with courtesy copies delivered to the chambers of the Honorable Paul G. Gardephe, United States Courthouse, 40 Foley Square, New York, NY 10007. Any requests for an extension of time for filing objections must be directed to Judge Gardephe.
FAILURE TO FILE OBJECTIONS WITHIN FOURTEEN (14) DAYS WILL RESULT IN A WAIVER OF OBJECTIONS AND WILL PRECLUDE APPELLATE REVIEW. 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72. See Thomas v. Arn, 474 U.S. 140 (1985); Wagner & Wagner, LLP v. Atkinson, Haskins, Nellis, Brittingham, Gladd & Carwile, P.C., 596 F.3d 84, 92 (2d Cir. 2010).