United States District Court, W.D. Kentucky, Owensboro Division
MEMORANDUM OPINION AND ORDER
Brent Brennenstuhl United States Magistrate Judge.
counsel, Sara Martin Diaz, moves the Court, pursuant to 42
U.S.C. § 406(b), for authorization of attorney fees in
the total amount of $7, 427.00 for her representation of
Plaintiff before the Court (DN 22). Her representation
resulted in a remand of the case to the Commissioner for
further administrative proceedings and ultimately a fully
Plaintiff-favorable decision (Id.). Defendant,
Andrew Saul, Commissioner of Social Security
(“Commissioner”), suggests that a reduction in
the requested fee is warranted to avoid counsel receiving an
unreasonable windfall (DN 23). At the Court's direction
(DN 24), the parties have submitted supplemental
memoranda addressing whether the amount sought constitutes an
inappropriate windfall (DN 25, 26). For the reasons that
follow, the motion will be granted, in part, and denied, in
August 21, 2017, Plaintiff filed a complaint seeking judicial
review of the final decision of the Commissioner pursuant to
42 U.S.C. § 405(g) (DN 1). The Commissioner filed an
answer and a copy of the administrative record (DN 9, 10).
Plaintiff filed a Fact and Law Summary setting forth his
challenges to the final decision of the Commissioner (DN 15).
Thereafter, the Commissioner filed a joint stipulation that
the matter should be remanded to the Commissioner pursuant to
sentence four of 42 U.S.C. § 405(g) (DN 19). The Court
issued an order remanding the case to the Commissioner
pursuant to sentence four of 42 U.S.C. § 405(g) (DN 20).
The judgment was entered on May 1, 2018 (DN 21).
Plaintiff-favorable decision dated March 13, 2019, an
Administrative Law Judge awarded Social Security Disability
benefits as of April 15, 2019 (Affidavit of Counsel DN 22-1
PageID # 1509). The Notice of Award dated April 15, 2019,
announced that a total of $53, 708.00 in past-due benefits
had been awarded to Plaintiff for December 2011 through March
2019 (DN 22-1 PageID # 1510, 1518).
past-due benefits awarded, the Social Security Administration
(SSA) withheld $13, 427.00 (25%) for direct payment of
attorney fees pursuant to the terms of the contingency fee
agreement between Plaintiff and his counsel (Id.).
The SSA has already authorized and counsel has received $6,
000.00 for her representation of Plaintiff before the
Commissioner (DN 22-1 PageID # 1510, 1519). Counsel now seeks
an award of $7, 427.00 for her representation of Plaintiff
before the Court.
argues the Court should approve her request for $7, 427.00
(DN 22, 22-1). This amount constitutes what remains of the
25% of past-due benefits withheld by the SSA for direct
payment of attorney fees under the terms of the contingency
fee agreement (DN 22, 22-1). The Commissioner, representing
the interests of Plaintiff whose back benefits pay for the
fees, opposes this sum because counsel will receive a
“windfall” considering her limited number of
hours worked in the Court. See Gisbrecht v.
Barnhart, 535 U.S. 789, 798 n. 6 (2002) (recognizing the
Commissioner acts much like a trustee for the claimant in the
district court renders a judgment favorable to a claimant
seeking Social Security Disability Insurance Benefits, 42
U.S.C. § 406(b) permits it to award “a reasonable
[attorney's] 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, ”
payable out of the claimant's past-due
benefits. 42 U.S.C. § 406(b)(1)(A); Lasley
v. Comm'r of Soc. Sec., 771 F.3d 308, 309 (6th Cir.
2014); Allan v. Commissioner, No. 10-11651, 2014 WL
1818110, at *1 (E.D. Mich. May 7, 2014). A judgment issued by
a federal court either awarding benefits or remanding the
matter to the Commissioner may be considered
“favorable” within the meaning of the statute, so
long as the claimant is awarded benefits “by reason
of” the judgment. Nolan v. Comm'r of Soc.
Sec., No. 4:11-CV-5, 2013 WL 5937908, at *1 (E.D. Tenn.
Nov. 5, 2013) (citing Bergen v. Comm'r of Soc.
Sec., 454 F.3d 1273, 1277 (11th Cir. 2006)).
the Court rendered a judgment favorable to Plaintiff because:
(1) it remanded his case to the Commissioner (DN 20, 21); and
(2) he was awarded Social Security Disability Benefits by
reason of the judgment (DN 22-1 PageID # 1509). Having
determined the prerequisite satisfied, the Court will address
counsel's request for a fee payable out of
Plaintiff's past-due benefits.
42 U.S.C. § 406(b)(1)(A) imposes a 25% cap on past due
benefits and a requirement that courts determine the
“reasonableness” of the fee up to that ceiling.
Lasley, 771 F.3d at 309; Rodriquez v.
Bowen, 865 F.2d 739, 746 (6th Cir. 1989). While the 25%
cap serves as a starting point for the Court's
evaluation, it should not be considered per se
reasonable. See Lasley, 771 F.3d at 309;
Rodriquez, 865 F.2d at 746.
mentioned above, Plaintiff and counsel executed a fee
agreement (DN 22-1 PageID # 1514). Due deference should be
given to their expressed intentions in the agreement. See
Rodriquez, 865 F.2d at 746. But the Court is not bound
by the fee agreement, see Rodriquez, 865 F.2d at 746
(citations omitted), because it is tasked with assuring the
fee authorized is reasonable for the services rendered.
See Gisbrecht, 535 U.S. at 807.
court decides not give effect to the terms of the fee
agreement, it should identify the deductions being made and
articulate the reasons for doing so. See Lasley, 771
F.3d at 309-10 (citing Gisbrecht, 535 U.S. at 808);
Rodriquez, 865 F.2d at 746. Generally, deductions
for large fees fall into two categories: (1) those caused by
counsel's improper conduct or ineffectiveness; and (2)
“situations in which counsel would otherwise enjoy a
windfall because of either an inordinately large benefit
award or from minimal effort ...