United States District Court, W.D. Wisconsin
OPINION AND ORDER
WILLIAM M. CONLEY DISTRICT JUDGE.
Before the court is plaintiff Stephen Utterback’s counsel’s motion for authorization of attorney’s fees pursuant to 42 U.S.C. § 406(b). (Dkt. #26.) This court previously reversed the Commissioner’s decision finding Utterback not disabled, and remanded this case for further administrative proceedings consistent with that opinion and order. (3/12/14 Order (dkt. #16).) Consistent with the parties’ subsequent joint stipulation, the court also awarded plaintiff attorney’s fees and costs under the Equal Access to Justice Act, 28 U.S.C. § 2412, in the amount of $7, 033.72. (5/27/14 Order (dkt. #19); 6/16/14 Judgment (dkt. #20).)
On remand, plaintiff received a total award of $93, 193.00 in past-due benefits. Pursuant to § 406(b) and the terms and conditions of a fee agreement between Utterback and his counsel, plaintiff’s counsel now moves for an award of 25% of the past-due social security disability benefits (minus the amount he previously received under the EAJA). For the reasons that follow, the court will grant that motion.
Title 42 U.S.C. § 406(b)(1)(A) provides in pertinent part:
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, and the Commissioner of Social Security may, notwithstanding the provisions of section 405(i) of this title, but subject to subsection (d) of this section, certify the amount of such fee for payment to such attorney out of, and not in addition to, the amount of such past-due benefits.
In Gisbrecht v. Barnhart, 535 U.S. 789 (2002), the United States Supreme Court described the appropriate approach to fee requests under § 406(b), holding that fees yielded by contingency fee agreements should operate as the starting point. Id. at 808-09. Mindful, of course, of the statutory limit of 25%, courts then review the fee request for reasonableness. Id. In particular, the Supreme Court approved reduction of fees “based on the character of the representation and the results the representative achieved.” Id. at 808.
The fee agreement between Utterback and his counsel provides in pertinent part:
If the first ALJ decision after the date of this agreement is a denial and my attorney agrees to appeal and I win my case later, the fee will be twenty-five percent (25%) of all back benefits awarded in my case.
(Mot. for Attorney Fees, Ex. A (dkt. #26-2).)
Without reviewing the entire procedural history, on remand, plaintiff received an award of $93, 193.00. Twenty-five percent of that amount of past-due social security disability insurance benefits is $23, 298.25. Plaintiff’s counsel previously received $7, 033.72, which acts as a credit. Thus, in this motion, plaintiff seeks an order certifying the Commissioner to pay him $16, 264.53 out of Utterback’s award.
In support of this motion, Attorney Duncan relies on (1) his experience, reputation and ability; and (2) the reasonableness of the fee request under a lodestar calculation. While his math is somewhat difficult to follow, Attorney Duncan apparently spent approximately 58 hours representing the plaintiff before this court and in the subsequent administrative process on remand, and a paralegal spent an additional 30 hours. With just those hours -- not counting approximately 40 hours in something called “administrative time” -- that works out to an hourly rate for Attorney Duncan of approximately $324, assuming a paralegal rate of $150. (Pl.’s Opening Br. (dkt. #27) 6.) The court finds this hourly rate reasonable in light of Attorney Duncan’s level of experience and his non-contingent hourly rate of $250 for work comparable to social security appeals. Moreover, the amount of time spent in pursuing the appeal and at the administrative level also appears reasonable. Given the uncertainty inherent in these cases, even with a growing body of case law favoring plaintiffs in social security disability claims, this rate may still understate the risk of non-payment inherent in such cases.
While plaintiff’s counsel’s motion for attorney’s fees was pending, and well after the date set for any response had past, the Commissioner nevertheless filed a response questioning whether the court should take into consideration the fact that Utterback may be required to repay to the Office of Personnel Management based on that office’s payment of disability-retirement benefits. (Def.’s Resp. (dkt. #30) 5.) Specifically, as the Commissioner explains, “due to the corresponding reduction in OPM benefits, Utterback may only be approximately $33, 200 better off for having received past-due benefits from the Commissioner, even before he pays any attorney’s fees. If that is so, then 64% of the benefits paid by the Commissioner will in effect have inured to OPM’s benefit, not Utterback’s.” (Id. at 6-7 (emphasis added).) While the Commissioner does not take a position on whether the fee award should be reduced, she nonetheless thought that this dynamic should be brought to the court’s attention. (Id. at 9.)
The court invited Attorney Duncan to file a reply, which he has now done. Having reviewed the reply, the court agrees that the fact that Utterback may be required to pay back OPM benefits does not alter the relief he secured by means of Attorney Duncan’s representation. Accordingly, the court believes it fair to honor the parties’ agreement, and for the ...