United States District Court, D. New Mexico
ORDER DENYING MOTION FOR AN ORDER AUTHORIZING
ATTORNEY FEES PURSUANT TO 42 U.S.C. § 406(B)
KHALSA UNITED STATES MAGISTRATE JUDGE.
MATTER comes before the Court on the Martone Law
Firm, P.A.'s Motion for Order Authorizing Attorney Fees
Pursuant to 42 U.S.C. § 406(B) and Supporting Memorandum
(“Motion”), filed August 27, 2018. (Doc. 32.) No.
response was filed,  although the Motion indicated that the
Commissioner declined to concur in or oppose the Motion
because the Commissioner is not the real party in interest
regarding the 42 U.S.C. § 406(b) fees. See
Gisbrecht v. Barnhart, 535 U.S. 789, 798 n.6 (2002)
(the Commissioner “has no direct financial stake in the
answer to the § 406(b) question; instead, [she] plays a
part in the fee determination resembling that of a trustee
for the claimants”). The Court considered the Motion
and concluded that it required supplemental briefing to
address the Court's concerns regarding the timeliness of
Plaintiff's counsel's § 406(b) motion. The Court
entered an Order for Supplemental Briefing on September 18,
2018, and gave the parties until September 21, 2018, to do
so. (Doc. 33.) Defendant submitted supplemental briefing on
September 21, 2018. (Doc. 34.) Plaintiff's counsel did
22, 2015, Sandra Catherin Vasquez instituted an action in
this Court seeking judicial review of her denied claim for
disability benefits. (Doc. 1.) After filing her Motion to
Remand (Doc. 21), but before the Commissioner filed its
Response, the Commissioner moved to remand for further
proceedings (Doc. 27), which the Court granted (Doc. 28). The
parties subsequently filed a stipulated motion for
attorneys' fees under the Equal Access to Justice Act
(“EAJA”), and Ms. Vasquez was awarded $1, 579.20
in attorney fees. (Doc. 30.)
remand, the ALJ issued a fully favorable decision dated
December 21, 2016, finding that Ms. Vazquez has been disabled
since March 5, 2011. (Doc. 32-1 at 15.) A document titled
“Important Information, ” dated July 22, 2017,
explained to Ms. Vasquez that the SSA had withheld $14,
203.75 to pay her legal expenses. (Doc. 32-2 at 1.) The
document also indicated that the Administration already
approved and paid Ms. Vasquez's legal representative $10,
000 for the work done on her claim, and was withholding the
balance of $4, 203.75. (Id.) The Martone Law Firm,
having entered into a contingency fee contract with Ms.
Vasquez for legal services in the United States District
Court, now seeks an order authorizing fees pursuant to 42
U.S.C. § 406(b) in the amount of $4, 203.75 for the work
they performed on Ms. Vasquez's behalf before this Court
fees may be deducted from a successful social security
claimant's award of past-due benefits. Separate
subsections of 42 U.S.C. § 406 authorize fee awards for
representation before the SSA and in court, allowing
attorneys to receive fees for their work in both settings.
See 42 U.S.C. § 406(a), (b).
representation before the SSA, the statute permits an
attorney to file a fee petition or a fee agreement with the
agency “whenever the Commissioner . . . makes a
determination favorable to the claimant . . . .” 42
U.S.C. § 406(a). There is no express limit to the fees
an attorney may seek and receive in a petition; the
Commissioner must only “fix . . . a reasonable fee,
” id., while considering several factors.
See 20 C.F.R. § 404.1725(b) (2015) (outlining
the factors); see also Gisbrecht, 535 U.S. at 794
(explaining the fee petition process). For fees received
pursuant to a fee agreement for work before the SSA,
attorneys may currently receive a maximum award of the lesser
of $6, 000 or 25% of the past-due benefits. 42 U.S.C. §
representation in court, courts may award fees under §
406(b) when, as in this case, “the court remands a . .
. case for further proceedings and the Commissioner
ultimately determines that the claimant is entitled to an
award of past-due benefits.” McGraw v.
Barnhart, 450 F.3d 493, 496 (10th Cir. 2006).
The statute limits a fee award for representation before a
court to 25% of the claimant's past-due benefits. 42
U.S.C. § 406(a)(1)(A). Separate awards of attorney fees
for representation before the SSA and in court - for example,
fees pursuant to the EAJA and § 406(b) - are not limited
to an aggregate of 25% of past-due benefits. Wrenn v.
Astrue, 525 F.3d 931, 936-38 (10th Cir.
2008). However, if fees are awarded under both EAJA and
§ 406(b), the attorney must refund the lesser award to
the claimant. McGraw, 450 F.3d at 497 N.2
(10th Cir. 2006).
§ 406(b) permits contingency fee agreements, it requires
the reviewing court to act as “an independent
check” to ensure that fees awarded pursuant to such
agreements are reasonable. Gisbrecht, 535 U.S. at
807. Fee agreements are flatly unenforceable to the extent
that they provide for fees exceeding 25% of past-due
benefits, but fees may be unreasonable even if they fall
below this number, and there is no presumption that fees
equating to 25% of past-due benefits are reasonable.
Id. at 807 n.17. The attorney seeking fees bears the
burden of demonstrating the reasonableness of the fee.
Id. at 807.
reasonableness determination is “based on the character
of the representation and the results the representative
achieved.” Id. at 808. If the attorney is
responsible for delay, the fee may be reduced so that the
attorney does not profit from the accumulation of benefits
while the case was pending in court. Id. Such a
reduction also protects the claimant, as fees paid under
§ 406(b) are taken from, and not in addition to, the
total of past-due benefits. 42 U.S.C. § 406(b)(1)(A).
The fee may also be reduced if the benefits are large in
comparison to the amount of time spent on the case.
Gisbrecht, 535 U.S. at 808. A court may require the
claimant's attorney to submit a record of the hours spent
representing the claimant and a statement of the lawyer's
normal hourly billing rate for noncontingent-fee cases.
statute does not contain a time limit for fee requests.
However, the Tenth Circuit has held that a request
“should be filed within a reasonable time of the
Commissioner's decision awarding benefits.”
McGraw, 450 F.3d at 505 (citation omitted).
motion for award of fees under § 406(b)(1) should be
filed within a “reasonable time” of the
Commissioner's decision awarding benefits. Id.
The ALJ's favorable decision in this matter was issued on
December 21, 2016. (Doc. 32-1.) The “Important
Information” document, dated July 22, 2017, attached to
the Motion provides an explanation related to the
Administration's payment of Ms. Vasquez's legal
expenses. (Doc. 32-2.) Counsel represented in its Motion,
without more, that it “has not received a notice
stating the total back benefits awarded as a result of the
favorable ALJ decision.” (Doc. 32 at 2.) The Motion was
filed on August 27, 2018, one year and eight months
after counsel received notice of the ALJ's favorable
decision (Doc. 32-1), or thirteen months after their
receipt of the “Important Information” document.
(Doc. 32-2.) The question, therefore, before the Court is
whether the Motion was filed within a reasonable time.
See Early v. Astrue, 295 Fed.Appx. 916
(10th Cir. 2008) (finding that the district court
did not abuse its discretion in finding 406(b) motion
untimely where it was filed more than ...