IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF OHIO

EASTERN DIVISION

Douglas G. Havens, :

 Plaintiff, :

 v. : Case No. 2:12-cv-0637

Commissioner of Social : JUDGE GEORGE C. SMITH

 Security, Magistrate Judge Kemp

 :

Defendant. 

 

 REPORT AND RECOMMENDATION

This Social Security case was remanded to the Commissioner

on June 12, 2013, pursuant to 42 U.S.C. §405(g), sentence four. 

Plaintiff subsequently received, by stipulation and order,

attorneys’ fees in the amount of $4,100.00 under the Equal Access

to Justice Act, 28 U.S.C. §2412. Plaintiff’s counsel has now

moved for an award of fees under 42 U.S.C. §406(b), asking for

$20,422.00 (of which $4,100 would be returned to Plaintiff to

offset the earlier EAJA award). The Commissioner opposes an

award in that amount. For the following reasons, the Court

recommends granting the motion in substantial part. 

I.

 The pertinent information concerning the motion for fees

can be stated as follows. Plaintiff signed a fee agreement with

counsel in which he agreed to a 25% contingent fee. After this

Court remanded the case, Plaintiff was awarded benefits in the

total amount of $85,774.00. Of that total, $81,688.00 had

accrued at the time of the Administrative Law Judge’s decision. 

Counsel is seeking an award of 25% of that amount, or $20,422.00. 

Counsel spent a total of 24.75 hours litigating the case in this

Court. Should the Court grant the fees requested, counsel would

be compensated at the rate of $825.13 per hour. The Commissioner

argues that this hourly rate is excessive, and urges the Court to

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reduce the hourly rate to no more than $360.00.

II.

The standards for reviewing a petition for attorneys’ fees

under 42 U.S.C. §406(b) are set forth in some detail in the Sixth

Circuit’s decisions of Rodriquez v. Bowen, 865 F.2d 739 (6th Cir.

1989) (en banc), and Hayes v. Secretary of HHS, 923 F.2d 418 (6th

Cir. 1991). Rodriquez stands for the proposition that an award

in the amount of twenty-five percent of the past due benefits is

presumptively appropriate so long as it is derived from a

contingent fee contract between counsel and the claimant

permitting that amount to be charged. Hayes concluded that "[a]

calculation of a hypothetical hourly rate that is twice the

standard rate is a starting point for conducting the Rodriquez

analysis," 923 F.2d at 422, noting that a fee in the amount of

twice the standard hourly rate is per se reasonable and

establishes a floor for awarding of attorneys’ fees below which

the District Court may not ordinarily drop on grounds that

counsel is receiving a windfall from an award in excess of his or

her usual hourly rate. 

This is not to say that attorneys’ fees petitions can never

be scrutinized or discounted by the District Court. Both

Rodriquez and Hayes make clear that the District Court can reduce

a fee request, especially one which asks for more than twice the

normal hourly rate, if a disproportionate amount of the lawyer’s

time charged is for services ordinarily performed by clerical or

paralegal staff; if the case is not particularly difficult or

complex; if there was some improper or ineffective action taken

by counsel during the course of the case; or if the fee was not

truly contingent, as in the situation where no fee agreement is 

signed until after the benefits award has already been made. 

See, e.g., Damron v. Commissioner of Social Security, 104 F.3d

853, 856 (6th Cir. 1997). Also, even in a case where the

government has filed no response to the fee petition, "[d]espite

the absence of an objection . . . a District Court must review

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each case to determine the amount of a reasonable fee, and

clearly state the basis for its determination." Lanham v.

Secretary of HHS, 145 F.R.D. 409, 410 (E.D. Mich. 1992). 

Finally, in a case where the District Court awards benefits, any

fee award must be limited to twenty-five percent of the benefits

which accrued up to the date three months after the case became

ripe for decision. Dearing v. Secretary of HHS, 815 F.2d 1082

(6th Cir. 1987). 

III.

 The Commissioner has cited to a number of decisions which

have awarded amounts not exceeding $360.00 per hour in the

context of a §406(b) application. On the other hand, there are

numerous decisions from this Court which have awarded

substantially more. See, e.g., Willis v. Commissioner of Social

Sec., 2014 WL 2589259 (S.D. Ohio June 10, 2014)(describing cases 

in which the awards ranged from $360.00 per hour to $1,276.60). 

This Magistrate Judge has recommended approval of an hourly rate

of $750.00 in a §406(b) case, which was basically the “floor”

described in Hayes since the record supported a usual hourly

billing rate of $350.00, to which the Court added $25.00 per hour

to compensate counsel for administrative delays. See Smith v.

Commissioner of Social Sec., 2014 WL 618996 (S.D. Ohio Feb. 18,

2014), adopted and affirmed 2014 WL 1046025 (S.D. Ohio March 17,

2014). The lesson that all these cases teach is that the Court

is to make an individualized determination in each case based on

an evaluation of the various relevant factors.

One key factor, of course, is what the “floor” for the

analysis is under Hayes, which, in turn, requires the Court to

determine the “usual hourly rate” for the services rendered. The

Commissioner appears to accept counsel’s representation that his

normal hourly rate for non-contingent fee work is $250.00. Under

Hayes, using that rate, the floor for an award would be twice

that rate ($500.00 per hour) multiplied by 24.75 hours, or

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$12,375.00. The Commissioner does not really explain why the

Court should make a lesser award, or how that would comport with

Hayes. The Court therefore begins its analysis with the

$12,375.00 figure.

Plaintiff’s counsel argues for a larger award based on these

factors. First, counsel achieved an excellent result for the

Plaintiff, obtaining not just a sentence four remand from this

Court but, upon remand, a favorable award, resulting in a

financial benefit to the Plaintiff measured in hundreds of

thousands of dollars. Second, counsel handled the matter

efficiently. Third, Plaintiff agreed to the contingent fee. 

Fourth, the hourly rate which counsel charges in other matters is

not really representative of the rate to be used in a contingent

fee case, especially a social security case. Additionally, other

Columbus attorneys with similar years of experience typically

bill between $450 and $510 per hour.

This last argument does not carry significant weight where,

as here, the rate which is presumptively reasonable under Hayes

is in that exact range. The question is whether a higher rate is

also reasonable. There is some merit in the argument that

counsel should be rewarded for handling the matter with both

expertise and efficiency, and those factors persuade the Court

that using an hourly rate three times what counsel ordinarily

charges in non-contingent fee work is reasonable. The amount of

administrative delay is not a factor since counsel continued to

perform services at the administrative level in order to obtain a

favorable decision, and because counsel has voluntarily limited

his request to 25% of the amount of back benefits at the time of

the ALJ’s decision. All of this convinces the Court that an

award of fees using a hypothetical rate of $750.00 per hour is

reasonable. Consequently, the Court will recommend an award of

$18,562.50, with a refund to be made to Plaintiff of the

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$4,100.00 previously awarded under the EAJA.

IV.

For these reasons, it is recommended that the motion for

attorneys’ fees (Doc. 21) be granted and that counsel be awarded

fees of $18,562.50 under 42 U.S.C. §406(b), with a refund to be

made to Plaintiff of the $4,100.00 previously awarded under the

EAJA.

Procedure on Objections

If any party objects to this Report and Recommendation,

that party may, within fourteen (14) days of the date of this

Report, file and serve on all parties written objections to those

specific proposed findings or recommendations to which objection

is made, together with supporting authority for the objection(s). 

A judge of this Court shall make a de novo determination of those

portions of the report or specified proposed findings or

recommendations to which objection is made. Upon proper

objections, a judge of this Court may accept, reject, or modify,

in whole or in part, the findings or recommendations made herein,

may receive further evidence or may recommit this matter to the

magistrate judge with instructions. 28 U.S.C. §636(b)(1).

 The parties are specifically advised that failure to

object to the Report and Recommendation will result in a

waiver of the right to have the district judge review the

Report and Recommendation de novo, and also operates as a

waiver of the right to appeal the decision of the District

Court adopting the Report and Recommendation. See Thomas v.

Arn, 474 U.S. 140 (1985); United States v. Walters, 638 F.2d

947 (6th Cir. 1981).

/s/ Terence P. Kemp 

 United States Magistrate Judge

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