United States District Court, W.D. Kentucky, Owensboro Division
MURRAY L. CARTER PLAINTIFF
ANDREW SAUL, COMMISSIONER SOCIAL SECURITY ADMINISTRATION DEFENDANT
MEMORANDUM OPINION AND ORDER
Brent Brennenstuhl, United States Magistrate Judge.
counsel moves the Court, pursuant to 42 U.S.C. § 406(b),
for authorization of attorney fees in the total amount of $4,
628.00 for representation of Plaintiff before the Court (DN
23, DN 29-4 PageID # 2106). 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 24).
At the Court's direction (DN 25), the parties have submitted
supplemental memoranda addressing whether the amount sought
constitutes an inappropriate windfall (DN 26, 29, 30). For
the reasons that follow, the motion will be granted in part
and denied in part.
April 24, 2015, 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 10, 11).
Plaintiff filed a Fact and Law Summary setting forth his
challenges to the final decision of the Commissioner (DN 14).
Thereafter, the Commissioner filed a Fact and Law Summary (DN
19). The Court issued a memorandum opinion and order
reversing the final decision of the Commissioner and
remanding the case to the Commissioner pursuant to sentence
four of 42 U.S.C. § 405(g) (DN 20). The judgment was
entered on April 15, 2016 (DN 21).
Plaintiff-favorable decision dated June 15, 2018, an
Administrative Law Judge awarded Social Security Disability
benefits (Affidavit of Counsel DN 29-4 PageID # 2104). The
Notice of Award dated October 9, 2018, announced that
past-due benefits had been awarded to Plaintiff for December
2012 through August 2018 (DN 23-1 PageID # 2049, 2050).
past-due benefits awarded, the Social Security Administration
(SSA) withheld $13, 178.00 (25%) for direct payment of
attorney fees pursuant to the terms of the contingency fee
agreement between Plaintiff and the law firm Rhoads &
Rhoads, PSC (DN 23-1 PageID # 2044, 2053, 2057; DN 29-4
PageID # 2105). The SSA has already authorized and separately
paid three attorneys in the Rhoads law firm a total of $8,
550.00 for their representation of Plaintiff before the
Commissioner (DN 29-4 PageID # 2105). Thus, $4, 628.00
remains of the past-due benefits withheld for direct payment
of attorney fees (Id.).
attorney Bradley P. Rhoads filed the motion for authorization
of attorney fees, a supporting affidavit, and an itemization
of 35.25 hours of time that he and staff in the law office
expended on Plaintiffs case before the Commissioner and the
Court (DN 23). However, in a letter dated July 10, 2019,
Defendant expressed concerns about the identity of the
attorney who actually performed the work before the Court and
the accuracy of time sheet submitted to the Court (DN 29-1).
Specifically, the letter pointed out that time sheets
submitted to the Social Security Administration indicated Ms.
Martin-Diaz, not Mr. Rhoads, had worked on the case before
the Court and she reported four hours, not six, were expended
for the preparation and filing of the memorandum of law with
the Court (DN 29-1 PageID # 2099).
letter prompted attorney Sara Martin-Diaz to file an addendum
that includes a supplemental memorandum, an amended time
sheet, and an affidavit from her (DN 29). Ms. Martin-Diaz
confirmed that she, not Mr. Rhoads, performed all work before
the Court (DN 29 PageID # 2094-95; DN 29-4 PageID # 2106).
Further, she confirmed that she expended four, not six, hours
preparing and filing the memorandum of law, thereby reducing
from 7.25 to 5.25 the total hours she expended before the
Court (DN 29-3 PageID # 2103, DN 29-4 PageID # 2106). Ms.
Martin-Diaz's affidavit indicates she performed an
additional four hours of work preparing and filing the motion
for attorney fees and all related materials (DN 29-4 PageID #
2106). Ms. Martin-Diaz seeks an award of $4, 628.00 for
representing Plaintiff before the Court (Id.).
Martin Diaz argues the Court should approve her request for
$4, 628.00. 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. 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 level of experience and the limited number of
hours she expended before 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); Laslev
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. 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; Rodriguez 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;
Rodriguez, 865 F.2d at 746.
mentioned above, Plaintiff and the Rhoads law firm executed a
fee agreement (DN 23-1 PageID # 2057). Due deference should
be given to their expressed intentions in the agreement.
See Rodriguez, 865 F.2d at 746. But the Court is not
bound by the fee agreement, see Rodriguez, 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
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);
Rodriguez, 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 expended."