United States District Court, D. New Mexico
MEMORANDUM OPINION AND ORDER
STEPHAN M. VIDMAR UNITED STATES MAGISTRATE JUDGE
MATTER is before the Court on Plaintiff's Motion for
Order Authorizing Attorney Fees Pursuant to 42 U.S.C. §
406(b) and Supporting Memorandum [Doc. 30], filed on June 19,
2019. The motion seeks $18, 623 in attorney fees for legal
services rendered before the Court. Id. at 1. The
Commissioner responded on July 5, 2019; she takes no position
on the request for fees. [Doc. 31] at 2. The parties have
consented to the undersigned's entering final judgment in
this case. [Doc. 8]. Having reviewed the briefs, the record,
and the applicable case law and being otherwise fully advised
in the premises, I find that the Motion is well-taken and
should be granted. Plaintiff should be awarded $18, 623 in
Commissioner denied Plaintiff's application for a period
of disability, disability insurance benefits, and
supplemental security income. See [Doc. 25] at 4.
After exhausting her administrative appeals, Plaintiff timely
filed an action in this Court on November 8, 2016. [Doc. 1].
Ultimately, the Court reversed the Commissioner's denial
of benefits and remanded the case for further proceedings.
[Docs. 25, 26]. On remand from this Court, an ALJ issued a
final administrative decision fully favorable to Plaintiff on
October 15, 2018. Notice of Decision - Fully Favorable [Doc.
30-1] at 1, 5-11. Plaintiff was awarded back benefits
totaling approximately $98, 492. See [Doc. 30] at 4;
Notice of Award [Doc. 30-1] at 14. The Commissioner has
withheld $24, 623 to pay for representation before the
Administration and before this Court.[Doc. 30] at 1; [Doc. 30-1]
and her counsel entered into a contingency fee agreement
providing that Plaintiff would pay her attorney 25% of any
back benefits in exchange for representation in federal
court. This fee would be in addition to any fee that
Plaintiff had agreed to pay for representation before the
Administration. Fee Agreement-Federal Court, [Doc. 30-1] at
21. Plaintiff's counsel has requested $18, 623 for
representation before this Court, which is about 18.9% of the
back benefits awarded. [Doc. 30] at 5. Because the attorney
fees at issue here are not paid by the government but,
instead, are paid out of Plaintiff's benefits, the
Commissioner has no interest in the instant motion for fees.
[Doc. 31] at 2. She “generally takes no position on
such petitions.” Id.
may award attorney's fees pursuant to 42 U.S.C. §
406(b)(1) where the claimant receives a favorable
administrative decision following a remand of the case to the
Secretary for further consideration. In relevant part, the
statute at issue states:
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) (2018). “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). The
Whitehead court reasoned that “Congress
recognized the difference between the mandatory term
‘shall' and the permissive term
‘may.'” Id. Congress used
“shall” in 406(a) and “may” in 406(b)
where the statute specifically provides that the court is
expected to determine whether to allow attorney's fees.
Id. Traditionally, an award of attorney's fees
is a matter within sound discretion of the court.
Gisbrecht v. Barnhart, the Supreme Court concluded
that § 406(b) was designed by Congress to
“control, not displace, fee agreements between Social
Security benefit claimants and their counsel.” 535 U.S.
789, 792 (2002). Courts should review fee arrangements
“as an independent check, to assure that they yield
reasonable results in particular cases.” Id.
at 807. The statute imposes the 25%-of-past-due-benefits
limitation on fees as a ceiling, not as a standard to be used
to substantiate reasonableness. Id. at 808-09.
have reduced attorney fee “recovery based on the
character of the representation and the results the
representation achieved.” Id. at 808. In cases
where plaintiffs' attorneys have caused delays or
provided substandard representation or if the benefits are
large in comparison to the amount of time counsel spent on
the case, courts have authorized reduced fees. Id.;
see also McGuire v. Sullivan, 873 F.2d 974, 981 (7th
Cir. 1989) (explaining that “the court should consider
the reasonableness of the contingency percentage to make sure
the attorney does not receive fees which are out of
proportion to the services performed, the risk of loss and
the other relevant considerations”). Ultimately,
plaintiffs' attorneys have the burden of showing that the
fee sought is reasonable. Gisbrecht, 535 U.S. at
808. “Within the 25 percent boundary, . . . the
attorney for the successful claimant must show that the fee
sought is reasonable for the services rendered.”
Id. at 807.
the Court must determine if the Fee Agreement meets §
406(b)(1) guidelines. In ...