United States District Court, E.D. Wisconsin
ORDER GRANTING SUPPLEMENTAL MOTION FOR ATTORNEY FEES
UNDER 42 U.S.C. §406(B) (DKT. NO. 31)
PAMELA PEPPER UNITED STATES DISTRICT JUDGE
March 27, 2015, Judge Rudolph Randa approved the parties'
stipulation for remand and remanded this case to the Social
Security Commissioner under Sentence Four of 42 U.S.C.
§405(g). Dkt. No. 20. The parties stipulated to an award
of attorney fees under the Equal Access to Justice Act in the
amount of $4, 700, which Judge Randa approved on June 30,
2015. Dkt. No. 27. A year later, after receiving a fully
favorable decision from the Commissioner on April 1, 2016,
the plaintiff filed a motion for attorneys' fees under 42
U.S.C. §406(b)(1). Dkt. No. 28. This court signed an
order on behalf of Judge Randa, granting the motion, awarding
the plaintiff $17, 843.50 in fees and instructing the
plaintiff to refund the $4, 700 in EAJA attorney's fees.
Dkt. No. 30. The plaintiff since has filed a supplemental
motion for $11, 725.25 in attorneys' fees under 42 U.S.C.
§406(b)(1), based on additional benefits paid to the
plaintiff's children. Dkt. No. 31. The plaintiff's
attorney requests a total fee of $29, 568.75 (which includes
the prior award of $17, 843.50). Id. at 1.
court will grant the motion and award the additional fees.
attorney who succeeds in obtaining benefits for a social
security claimant may recover fees under 42 U.S.C. §406.
“‘Section 406(a) governs fees for representation
in administrative proceedings before the Social Security
Administration; § 406(b) controls fees for
representation in federal court.'” Kopulos v.
Barnhart, 318 F.Supp.2d 657, 660 (N.D. Ill. 2004)
(citing Gisbrecht v. Barnhart, 535 U.S. 789, 794
(2002)). The statute provides for a reasonable fee not to
exceed 25% of the past-due benefits awarded to the claimant.
Id. at 661. Such fees are deducted from the
claimant's benefits and do not constitute an award
against the government. Id.
court must approve any fee under §406(b). Congress did
not intend such review to override the claimant and
counsel's fee arrangement but rather to act as an
“independent check” to ensure the arrangement
yielded a reasonable result. Gisbrecht, 535 U.S. at
807. Within the 25% boundary, the attorney for the successful
claimant must show that the fee sought is reasonable for the
services rendered. Id. In making its determination,
the court may consider the character of the representation
and the results obtained, reducing the award if the attorney
is responsible for delay in the proceeding that had the
effect of inflating past-due benefits, or if the fee is so
large in comparison to the amount of time the counsel spent
on the case that the fee would constitute a windfall for the
attorney. Id. at 808.
plaintiff signed a contract with her attorney on September
11, 2014, agreeing to a 25% total fee for representation
before the agency and the court. The second sentence of the
fee contract stated:
I agree that my attorney shall charge and receive as the fee
an amount equal to twenty-five percent (25%) of the past-due
benefits that are awarded to my family and me in the event my
case is won.
Dkt. No. 28-1 at 1. The supplemental motion indicates that
counsel makes it in accordance with that provision in the
contract, and notes that the provision includes past-due
benefits awarded to the plaintiff's “family”
as well as to the plaintiff. Dkt. No. 31 at 2.
government filed a response to the supplemental motion,
indicating that while it has financial stake in the
court's decision, the Commission plays something of a
“trustee” role for a claimant in fee
determination proceedings. Dkt. No. 34 at 2. In that role,
the government expressed concern that the requested total
award of $29, 568.75 for a total of 26.17 hours worked
amounted to an hourly rate of $1, 129.87. Id. at 4.
The government surveyed the law on such awards, discussing
court assessments of the risks involved in contingency fee
agreements, the mitigation of that risk from the EAJA fee and
the difficulty in calculating an implied hourly rate in
Social Security cases. Id. at 3-7. The government
asserted that an hourly rate of $1, 129.87 was “very
high, albeit not unprecedented.” Id. at 7.
plaintiff's counsel responded that the government relied
on Sixth Circuit law, which appears to rely on a lodestar
calculation. Dkt. No. 35 at 1. Nothing that the Supreme Court
had rejected the lodestar approach in 2002, the
plaintiff's counsel urged the court to look at the
factors enumerated in the Supreme Court's decision,
Gisbrecht v Barnhart, 535 U.S. 789 (2002).
Id. at 1-2. The plaintiff's reply brief walked
through each of those factors, explaining in detail why the
factor supported the fees the plaintiff's counsel is
requesting. Id. at 5-9. The plaintiff's counsel
also directed the court to one of the cases cited by the
Commissioner, in which Judge Peterson in the Western District
awarded an effective hourly rate of over $1, 000.
Id. at 8-9 (citing Heise v. Comm'r, No.
14-cv-739 (W.D. Wis. Dec. 15, 2016) at 4-5.
406(b) places two limitations on attorney's fee awards; a
cap of 25%, and a reasonableness requirement. The award the
plaintiff's counsel has requested plainly satisfies the
first of those limitations; it does not exceed the 25% cap.
The Commissioner's concern lies with the reasonableness
of the fee.
court agrees that an implied hourly rate of over $1, 000 per
hour is very high. The court has not conducted its own
survey, but it suspects that such an implied hourly fee
exceeds the norm for cases in this geographic area. But the
government is correct that the rate is not unprecedented.
Other judges in this district have declined to classify as
“windfalls” awards resulting in implied hourly
fees exceeding $1, 000 when the attorneys have achieved
favorable results while taking on the risk of a
contingent-fee basis. See Peterson v. Colvin, No.
12-cv-391 at Dkt. No. 32 (E.D. Wis. Sep. 3, 2015)
(Stadtmueller, J., approving an award resulting in an implied
hourly rate that exceeded $1, 000, based upon performance and
client approval); Kolp v. Colvin, No. 12-CV-842,
2015 WL 4623645, at *2 (E.D. Wis. Aug. 3, 2015) (Randa, J.,
granting in full request for $30, 757.23 award, equating to
$1, 118.44 hourly rate). When the plaintiff in this case
signed the contract, she agreed to pay 25% of whatever
past-due benefits were awarded to her family and to her. She
has stated that she agrees to the ...