Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-arwd-2_02-cv-02220/USCOURTS-arwd-2_02-cv-02220-0/pdf.json

Nature of Suit Code: 863
Nature of Suit: Social Security - DIWC/DIWW (405(g))
Cause of Action: 42:405 Review of HHS Decision (DIWC)

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AO72A

(Rev. 8/82)

IN THE UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF ARKANSAS

FORT SMITH DIVISION

RITA J. FUNDERBURG PLAINTIFF

v. CIVIL NO. 02-2220

JO ANNE B. BARNHART, Commissioner,

Social Security Administration DEFENDANT

ORDER

Before the court is counsel’s request for approval of attorney’s fees in the amount of

$8,713.75, pursuant to 42 U.S.C. § 406(b). (Doc. # 23). Plaintiff’s counsel requests 25% of her

past-due benefits based upon a contingency-fee agreement. Defendant responded that she has

no objection to the fee award and believes the request for 25% of plaintiff’s past due benefits is

reasonable. (Doc. # 25).

Background:

Plaintiff Rita J. Funderburg appealed theCommissioner's denial of benefits to this court.

On July 17, 2003, this court entered judgment (Doc. # 18) remanding plaintiff’s case to the

Commissioner pursuant to sentence four of 42 U.S.C. § 405(g) for further proceedings.

Plaintiff’s counsel moved for an award of fees under 28 U.S.C. § 2412, the Equal Access to

Justice Act (EAJA). (Doc. # 19). Counsel’s request was granted on October 31, 2003, awarding

fees and costs under the EAJA in the amount of $3,847.87, to be paid in addition to, and not out

of, any past-due benefits which plaintiff may be awarded in the future. (Doc. # 22). Following

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1. In determining a reasonable attorney’s fee, the court will in each case consider the following factors: (1) time and labor

 required; (2) the novelty and difficulty of the questions involved; (3) the skill requisite to perform the legal service

 properly; (4) the preclusion of other employment by the attorney due to the acceptance of the case; (5) the customary fee;

 (6) whether the fee is fixed or contingent; (7) time limitations imposed by the client or the circumstances; (8) the amount

 involved and the results obtained; (9) the experience, reputation and ability of the attorney; (10) the undesirability of the

 case; (11) the nature and length of the professional relationship with the client; and (12) awards in similar cases. Hensley

 v. Eckerhart, 461 U.S. 424, 430 n.3 (1983). These factors are generally accepted as being relevant to determining the

 reasonableness of requested fees in social security disability cases. McDonald v. Secretary of Health and Human

Services, 884 F.2d 1468, 1473 (1st Cir. 1989).

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remand, the ALJ issued a favorable decision on September 22, 2004, finding plaintiff entitled

to benefits. 

Applicable Law:

Statutory provision for the award of attorney's fees is found in 42 U.S.C. § 406(b)(1).

The relevant portion of that statute reads, "the court may determine and allow as part of its

judgment a reasonable fee . . . not in excess of 25 percent of the . . . past-due benefits to which

the claimant is entitled by reason of such judgment." This fee is payable out of, and not in 1

addition to, the amount of claimant's past-due benefits.

Section 406(b) also “calls for court review of such arrangements as an independent check,

to assure that they yield reasonable results in particular cases.” Gisbrecht, et al. v. Barnhart, 535

U.S. 789, 807 (2002). In Gisbrecht, the Supreme Court recognized the primacy of lawful

attorney-client fee agreements in determining reasonable attorney fees in cases where claimants

prevail in federal court. The Court held that "§ 406(b) does not displace contingent-fee

agreements within the statutory ceiling; instead, § 406(b) instructs courts to review for

reasonableness fees yielded by those agreements." Id., at 808-809.

Courts that approach fee determinations by looking first to the

contingent-fee agreement, then testing it for reasonableness, have

appropriately reduced the attorney’s recovery based on the

character of the representation and the results the representative

achieved. See, e.g., McGuire, 873 F.2d at 983 (“Although the

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contingency agreement should be given significant weight in

fixing a fee, a district judge must independently assess the

reasonableness of its terms.”); Lewis v. Secretary of Heath and

Human Servs., 707 F.2d 246, 249-250 (C.A.6 1983) (instructing

reduced fee when representation is substandard). If the attorney

is responsible for delay, for example, a reduction is in order so

that the attorney will not profit from the accumulation of benefits

during the pendency of the case in court. See Rodriquez, 865

F.2d, at 746-747. If the benefits are large in comparison to the

amount of time counsel spent on the case, a downward adjustment

is similarly in order. See id., at 747 (reviewing court should

disallow “windfalls for lawyers”); Wells, 907 F.2d, at 372 (same).

In this regard, the court may require the claimant’s attorney to

submit, not as a basis for satellite litigation, but as an aid to the

court’s assessment of the reasonableness of the fee yielded by the

fee agreement, a record of the hours spent representing the

claimant and a statement of the lawyer’s normal hourly billing

charge for noncontingent-fee cases. See Rodriquez, 865 F.2d, at

741. Judges of our district courts are accustomed to making

reasonableness determinations in a wide variety of contexts, and

their assessments in such matters, in the event of an appeal,

ordinarily qualify for highly respectful review.

Gisbrecht v. Barnhart, 535 U.S. 789, 808 (2002).

In 1980, Congress enacted the Equal Access to Justice Act, providing for fees payable

by the United States. These fees are determined not by a percent of the amount recovered, but

by the time expended and the attorney's hourly rate. 28 U.S.C. § 2412(d)(1)(B). Unlike fees

under § 406(b), these fees are paid in addition to, and not out of, the amount withheld from

claimant's past-due benefits for the payment of attorney's fees.

Recovery of an attorney's fee under both the EAJA and 42 U.S.C. § 406(b)(1) was

specifically allowed when Congress amended the EAJA in 1985. See Equal Access to Justice

Act, Extension and Amendment, P.L. No. 99-80, 99 Stat. 183 (1985).

To permit a fee award under the EAJA, assuming, of course, that

the necessary standard is met, in addition to that allowed by the

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district court out of claimant's past-due benefits does no more

than reimburse the claimant for his or her expenses and results in

no windfall to the attorney.

Meyers v. Heckler, 625 F.Supp. 228, 231 (S.D. Ohio 1985). 

Furthermore, awarding fees under both Acts facilitates the purposes of the EAJA, which

is to shift to the United States the prevailing party's litigation expenses incurred while contesting

unreasonable Government action. Id. See also Cornella v. Schweiker, 728 F.2d 978 (8th Cir.

1984). However, claimant's attorney must refund to the claimant the amount of the smaller fee.

Gisbrecht v. Barnhart, 535 U.S. 789, 796 (2002). "Thus, an EAJA award offsets an award under

Section 406(b), so that the [amount of the total past-due benefits the claimant actually receives]

will be increased by the . . . EAJA award up to the point the claimant receives 100 percent of the

past-due benefits." Id.

Additionally, the district court may only award fees for work done before it; it may not

approve fees for work done before the Secretary. Gowen v. Bowen, 855 F.2d 613 (8th Cir.

1988); Fenix v. Finch, 436 F.2d 831 (8th Cir. 1971).

Discussion:

Plaintiff's attorney seeks a fee award of $8,713.75, minus $4,000.00 for work performed

at the administrative level, leaving a fee award of $4,713.75. As previously noted, plaintiff

contracted to pay her attorney 25 percent of any past due benefits owing to her. Had counsel not

been successful in obtaining benefits for plaintiff, counsel would not be entitled to a fee award

under the contingency nature of the agreement and, therefore, runs a substantial risk of loss. In

addition, the benefits to plaintiff are substantial not in just past due benefits but benefits she will

continue to receive in the future. We have reviewed this request and find it to be within the

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statutory 25% ceiling, a reasonable request under the agreement, and does not represent a

windfall to plaintiff’s counsel.

Conclusion:

 In light of the foregoing factors, particularly the contingency nature of the case and the

substantial award to plaintiff both in back-pay and on-going benefits, we find counsel’s request

under the contingency agreement to be reasonable. Counsel is hereby awarded $8,713.75, minus

$4,000.00 for work at the administrative level, leaving an award of $4,713.75 to be paid out of

plaintiff's past due benefits. However, the $4,713.75 fee under Section 406(b) is offset by the

$3,662.50 previously awarded under the EAJA, as counsel must refund to the claimant the

amount of the smaller fee.

IT IS SO ORDERED this 28 day of March 2006. th

/s/ Beverly Stites Jones 

HON. BEVERLY STITES JONES

UNITED STATES MAGISTRATE JUDGE

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