United States District Court, D. New Mexico
ORDER GRANTING § 406(b) ATTORNEY FEES
MATTER is before the Court on Plaintiff's Motion for an
award of $12, 365.00 in attorney fees under 42 U.S.C. §
406(b)(1). Doc. 29. Defendant declined to take a
position with regard to the reasonableness of the requested
award. Doc. 30. The Court held a hearing this date
at which Attorney Gary Martone personally appeared for
Plaintiff and Attorney Melissa Schuenemann appeared
telephonically for Defendant. Being fully advised in the
premises, the Court finds that Plaintiff's Motion is
well-taken and should be granted.
instituted an action in this Court seeking judicial review of
Defendant's denial of her application for Social Security
disability benefits. This Court reversed the decision of the
Commissioner and remanded for a new hearing and awarded EAJA
fees in the amount of $3, 400.00. See Docs. 25, 26,
28. Following this Court's remand, the Social
Security Administration found Plaintiff to be disabled.
Although Plaintiff's counsel indicates that he has not
yet received a notice stating the total back benefits award,
he represents that it should be $89, 424.00 because
twenty-five percent of those benefits, $22, 356.00, was
withheld for attorney fees in the event that Plaintiff's
counsel were to bring a claim for attorney fees pursuant to
the retainer agreement. Plaintiff's counsel now seeks
authorization from this Court for an award of compensation
for legal services in an amount significantly less than that
court renders a judgment favorable to a Social Security
claimant who was represented before the court by an attorney,
the court may allow “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.” 42 U.S.C. § 406(b)(1)(A). Unlike EAJA
fees, which are paid in addition to past-due benefits, §
406(b) fees are paid out of past-due benefits. Wrenn ex
rel. Wrenn v. Astrue, 525 F.3d 931, 933-34 (10th Cir.
2008). If fees are awarded under both EAJA and § 406(b),
the attorney must refund the lesser award to the claimant.
Id. at 934. The court may award fees under §
406(b) when “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 493-96
(10th Cir. 2006).
§ 406(b) does not prohibit contingency fee agreements,
it renders them unenforceable to the extent that they provide
for fees exceeding 25% of the past-due benefits.
Gisbrecht v. Barnhart, 535 U.S. 798, 807 (2002);
Culbertson v. Berryhill, __U.S.__, 139 S.Ct. 517,
521-23 (January 8, 2019) (Section 406(b)(1)(A)'s 25% cap
applies only to fees for court representation and not to the
aggregate fees awarded under §§ 406(a) and (b)).
Section 406(b) also requires the court to act as “an
independent check” to ensure that fees are reasonable
even if they are less than 25% of the past-due benefits
because there is no presumption that 25% is reasonable.
Id. at 807 n. 17.
has the burden of demonstrating the reasonableness of the
fees. Id. at 807. The reasonableness determination
is “based on the character of the representation and
the results the representative achieved.” Id.
at 808. Factors relevant to the reasonableness of the fee
request include: (1) whether the attorney's
representation was substandard; (2) whether the attorney was
responsible for any delay in resolution of the case; and (3)
whether the contingency fee is disproportionately large in
comparison to the amount of time spent on the case.
Id. 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 billing
rate for non-contingency fee cases. Id. The statute
does not specify a deadline for requesting fees. See
42 U.S.C. § 406(b). The Tenth Circuit, however, 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.
case, the Court finds that the legal representation by the
Martone Law Firm, P.A. of Plaintiff was more than adequate,
and it obtained a fully favorable decision. Counsel did not
delay the proceedings before this Court. The instant Motion
was filed within a reasonable time after Plaintiff received
notice of entitlement to past-due benefits. The Court further
finds that the requested fees represent the full 25%
permitted by the retainer agreement and finds them
proportionate given the amount of time (19.4 hours) spent on
requested attorney fees hourly rate of roughly $636/hour
appears somewhat higher than the usual fee awards authorized
in this District under Section 406(b). See e.g., Marquez
v. Astrue, CIV 10-1165 CG (Doc. 30) (awarding
$10, 105 for 18.9 hours, or $534 per hour); Dimas v.
Astrue, CIV 03-1157 RHS (Doc. 34) (awarding
$17, 000 for 38.26 hours or $444 per hour). Yet it appears in
line with the $617.28/hour awarded to the Martone Law Firm by
Magistrate Judge Vidmar in Gallegos v. Colvin, CIV
12-0321 SMV (Doc. 32) and Magistrate Judge Lorenzo
Garcia's awards to the Martone Law Firm equivalent to a
$629.00 hourly rate authorized by in Heiskell v.
Astrue, CIV 04-0860 LFG (Doc. 29) and $625.00
hourly rate in Vento v. Astrue, CIV 04-0741
(Doc. 28). As Judge Garcia noted in Watts v.
Colvin, CIV 11-0445 LFG (Doc. 29), “while
the case was not difficult for an experienced social security
disability attorney, the number of hours devoted to the
substantive tasks reflects the experience and efficiency of
such attorneys, resulting in a decrease of time needed to
accomplish the tasks.” Id. at 5 (awarding
equivalent rate of $600.00 per hour).
performed its “independent check” duties, the
Court finds the requested award to be both appropriate and
reasonable. Specifically, the Court notes that Plaintiff is
not improperly requesting that the Government pay the
attorney's gross receipts tax or advanced costs. See
Williams, Astrue, CIV 10-0295 LAM, 2011 WL 13284607 at
*2 (D.N.M. 2011) (EAJA does not provide for an award of gross
receipts taxes); see also Shaw v. United States,
2018 WL 3598513 at *7 (28 U.S.C. § 1920 does not include
gross receipts taxes as recoverable costs). Rather, as
explained by Mr. Martone, those are costs for which his
client is responsible pursuant to the retainer agreement.
Thus, they will be simply withheld from the required
reimbursement to Plaintiff of the previous EAJA fee award.
IS HEREBY ORDERED that Plaintiffs Motion for
attorney fees under § 406(b) is
granted. The Court hereby authorizes $12,
356.00 in attorney fees for legal services rendered in United
States District Court, to be paid by the Social Security
Administration. Plaintiffs counsel will then reimburse to
Plaintiff the EAJA award of $3, 400.00 minus $1, ...