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Ortega v. Berryhill

United States District Court, D. New Mexico

May 9, 2017

NANCY A. BERRYHILL, Acting Commissioner of the Social Security Administration, Defendant.


          Laura Fashing United States Magistrate Judge

         THIS MATTER comes before the Court upon the Martone Law Firm, P.A.'s Motion for an Order Authorizing Attorney Fees Pursuant to 42 U.S.C. § 406(b), filed on February 6, 2017.

         Doc. 29. The motion seeks $13, 255.95 in attorney's fees for legal services rendered before the Court. Id. at 1. The Commissioner responded on February 8, 2017; she takes no position on the motion, but reminds the Court that if the motion is granted, the EAJA fees previously awarded in this case must be refunded to Mr. Ortega. Doc. 30 at 2. Having reviewed the briefs, the record, and the applicable case law, and being otherwise fully advised in the premises, I find the motion well taken and will GRANT it.

         I. Procedural History

         Mr. Ortega filed his application for Social Security Disability Benefits on August 23, 2010. AR 70. After being denied initially and upon reconsideration, Mr. Ortega requested and received a hearing before an Administrative Law Judge (“ALJ”). AR 9-37. The ALJ issued her unfavorable decision on January 25, 2012. AR 67-84. Mr. Ortega requested review by the Appeals Council, and the Appeals Council issued an order reversing the ALJ's unfavorable decision, and remanding the case for further proceedings. AR 85-88. The ALJ held a second hearing on January 16, 2016, at which Mr. Ortega was represented by Mr. Gary J. Martone. AR 38-62. The ALJ issued a second unfavorable decision on April 4, 2014. AR 89-111. The Appeals Council denied Mr. Ortega's request for review, making the ALJ's decision the final decision of the Commissioner. Mr. Ortega appealed to this Court on September 28, 2015. Doc. 1.

         Mr. Ortega filed his Motion to Reverse and Remand for Rehearing, With Supporting Memorandum on February 26, 2016. Doc. 17. On April 22, 2016, the Commissioner filed an Unopposed Motion for Remand Pursuant to Sentence Four of 42 U.S.C. § 405(g). Doc. 20. The Court granted this motion, remanded the case for additional proceedings, and entered final judgment on April 26, 2016. Docs. 21, 22.

         On July 5, 2016, Mr. Ortega filed an Unopposed Motion for Attorney Fees and Costs Pursuant to the Equal Access to Justice Act (“EAJA”), requesting $3933.00 in attorney fees and $420.88 in costs. Doc. 23. The Court granted this motion. Doc. 24.

         On remand, an ALJ held a third hearing and, on August 10, 2016, issued a final administrative decision awarding Mr. Ortega benefits. Doc. 29, Exh. A. The Social Security Administration awarded Mr. Ortega $143, 813.80 in back benefits. Doc. 29-3 at 1-16. This amount is calculated from Mr. Ortega's three notices of back benefit awards: February 29, 2016 notice awarding back benefits of $33, 674; August 28, 2016 notice stating that 25% of back benefits is $23, 255.95 (making total back benefits for this period $ 93, 023.80); and August 29, 2016 notice stating that 25% of dependent's back benefits is $4, 279.00 (making total back benefits for dependent $17, 116.00). Id.

         II. Standard

         42 U.S.C. § 406(a) governs fees for representation at administrative proceedings and § 406(b) governs fees for representation in court. McGraw v. Barnhart, 450 F.3d 493, 498 (10th Cir. 2006). “[E]ach authority sets fees for the work done before it; thus, the court does not make fee awards for work at the agency level, and the Commissioner does not make fee awards for work done before the court.” Id. Attorneys representing Social Security claimants in court may seek fees for their work under both EAJA and under § 406. Id. at 497.[1] If the Court awards both EAJA fees and § 406 fees, however, counsel must refund the smaller amount to the claimant. Id.

         Under 42 U.S.C. § 406(b)(1),

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.

         “The tenor of 406(b) is permissive rather than mandatory. It says that the court may make such an award, not that such an award shall be made.” Whitehead v. Richardson, 446 F.2d 126, 128 (6th Cir. 1971). Traditionally, an award of attorney's fees is a matter within sound discretion of the court. Id. “[T]he Social Security Act (SSA), 42 U.S.C. § 406(b)(1), allows the district court to award attorney's fees to claimant's counsel when the court remands a Title II Social Security disability case for further proceedings and the Commissioner ultimately determines that the claimant is entitled to an award of past-due benefits.” McGraw, 450 F.3d at 495-96.

         In Gisbrecht v. Barnhart, the Supreme Court rejected the lodestar method of calculating attorney fees for Social Security cases, “under which the number of hours reasonably devoted to each case was multiplied by the reasonable hourly fee.” 535 U.S. 789, 789, 798-99 (2002). The Supreme Court instead concluded that Congress designed § 406(b) “to control, not displace, fee agreements between Social Security benefit claimants and their counsel.” Id. at 793. Courts should review fee arrangements “as an independent check, to assure that they yield reasonable results in particular ...

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