United States District Court, W.D. Wisconsin
D. PETERSON, DISTRICT JUDGE.
January 13, 2017, the court reversed and remanded the
Commissioner's decision denying plaintiff Pierre
Abarca's application for disability benefits. Dkt. 12.
The court awarded plaintiff's attorney fees in the amount
of $5, 358 under the Equal Access to Justice Act (AEJA), 28
U.S.C. § 2412. Dkt. 15. On remand, the Administration
awarded plaintiff $52, 105 in past-due benefits for himself
and his two children. Plaintiff's attorney petitioned the
court for a representative fee award of $13, 026 under 42
U.S.C. § 406(b). Dkt. 17. Because plaintiff's
attorney failed to explain how much time he spent on the
case, the court could not evaluate the representative fee for
reasonableness, so it denied the petition without prejudice.
plaintiff's attorney renews his petition. Dkt. 24. Before
evaluating the reasonableness of the requested fee, the court
will address an inconsistency in this case. Usually, the
Administration withholds 25 percent of past-due benefits for
potential payment of fees under § 406(b). This time, it
didn't, because plaintiff's attorney indicated that
he would be paid by a third-party entity or government agency
and waived his right to collect fees from plaintiff.
See Dkt. 22-1. And yet now, plaintiff's attorney
attempts to collect fees from plaintiff. Plaintiff's
attorney explains that a third party, plaintiff's
long-term disability insurance carrier, paid for
representation at the administrative level, but plaintiff
agreed to pay his attorney directly for work performed at the
district court level. See Dkt. 24-1, at 2-3
(“I understand that the Social Security Administration
will hold out 25% of the past-due benefits and send the
approved fee to my attorney. If Social Security fails to
withhold this fee, I will pay the approved fee from the money
I have received. . . . I acknowledge that I will owe a fee
under this contract even if the fee for representation at the
administrative level is paid by a third party.”). So
the court will review the representative fee for
reasonableness, as required by § 406(b). See
Gisbrecht v. Barnhart, 535 U.S. 789, 807, 809 (2002).
evaluating a representative fee for reasonableness,
“the court may consider the character of the
representation and the results obtained, reducing an award if
. . . the fee is so large in comparison to the amount of time
counsel spent on the case such that the fee would constitute
a windfall to the attorney.” Koester v.
Astrue, 482 F.Supp.2d 1078, 1081 (E.D. Wis. 2007)
(citing Gisbrecht, 535 U.S. at 808). “In
determining what is a reasonable fee, the court should
consider: the time and labor required; the skill required;
whether the fee was contingent or fixed; the amount involved
and the result attained; the attorney's experience,
reputation, and ability; and awards in similar cases.”
Hodges-Williams v. Barnhart, 400 F.Supp.2d 1093,
1099 (N.D. Ill. 2005) (citing McGuire v. Sullivan,
873 F.2d 974, 979, 983 (7th Cir. 1989)).
plaintiff's attorney represents that he spent 28.2 hours
litigating plaintiff's case before this court.
Plaintiff's attorney briefed a motion for summary
judgment, prompting the Commissioner to stipulate to remand.
And plaintiff's attorney obtained favorable results for
court notes that the contingency fee here is equivalent to an
attorney compensation rate of approximately $462 per hour
($13, 026 for 28.2 hours of work). But the court will not
discount the fee just because it will compensate
plaintiff's attorney at a higher than usual hourly rate.
Contingent fee agreements often reflect larger hourly rates;
contingent fee agreements account for the attorney's risk
of non-recovery, and awarding the fee consistent with the
parties' agreement incentivizes attorneys to represent
social security claimants. “If courts regularly
invalidated reasonable contingency agreements in favor of a
lodestar fee, then attorneys would no longer enter into such
agreements.” McGuire, 873 F.2d at 980. For
these reasons, district courts across the country have
awarded representative fees that reflect varying hourly
rates, including $446, $625, $636, and $1, 500.
Koester, 482 F.Supp.2d at 1083 (collecting cases).
Because plaintiff's attorney obtained favorable results
for his client, and because the contingent fee agreement
supports the requested award, the court will grant the
unopposed petition for the requested attorney fee. See
Kopulos v. Barnhart, 318 F.Supp.2d 657, 669 (N.D. Ill.
2004) (awarding the requested representative fee because
“it is consistent with the Contract entered into
between Petitioner and Plaintiff, it is consistent with the
25% statutory cap for SSA fees, and the Commissioner has no
objection to the amount of the SSA award”).
final note. As plaintiff's attorney acknowledges, this
award requires plaintiff's attorney to return the
previously awarded $5, 358 EAJA fee award to plaintiff. When
an attorney receives fees for the same work under both §
406(b) and the EAJA, the attorney must return the smaller fee
to plaintiff; the EAJA fee award “offsets” the
§ 406(b) award. Gisbrecht, 535 U.S. at 796
(“Fee awards may be made under both prescriptions, but
the claimant's attorney must ‘refun[d] to the
claimant the amount of the smaller fee.'” (quoting
Act of Aug. 5, 1985, Pub. L. 99-80, § 3, 99 Stat. 186)).
ORDERED that plaintiff's attorney's renewed petition
for attorney fees under § 406(b), Dkt. 24, is GRANTED.
The court approves the representative fee award of $13, 026,
less the previously ...