Court Opinion

ID: 8407261
Source: CourtListenerOpinion
Date Created: 2022-11-01 21:00:17.870273+00
Date Added: 2024-06-11T16:47:25.404352
License: Public Domain

United States Court of Appeals
                     For the First Circuit

No. 21-1948

                           JOSE PAIS,

                      Plaintiff, Appellant,

                               v.

              KILOLO KIJAKAZI, Acting Commissioner,
                 Social Security Administration,

                      Defendant, Appellee.

          APPEAL FROM THE UNITED STATES DISTRICT COURT
                FOR THE DISTRICT OF RHODE ISLAND

       [Hon. Patricia A. Sullivan, U.S. Magistrate Judge]

                             Before

                  Kayatta, Lipez, and Thompson,
                         Circuit Judges.

     David Spunzo, with whom Green & Greenberg was on brief, for
appellant.
     Timothy Sean Bolen, with whom Zachary A. Cunha, United States
Attorney, Michael J. Pelgro, Regional Chief Counsel, Social
Security Administration, and Ronald W. Makawa, Special United
States Attorney, Social Security Administration, were on brief,
for appellee.

                        November 1, 2022
           THOMPSON, Circuit Judge.          Today's case brings to mind a

particularly useful adage:         He who hesitates is lost.       Counsel for

Jose Pais appeals from the district court's denial of his motion

for   attorneys'    fees,    which    he   filed    over   two    years   after

successfully representing Pais before both the Social Security

Administration (SSA) and the district court.                For the reasons

stated below, we affirm the district court's denial of the motion

as untimely.

                              I.     BACKGROUND

           Back in 2014, Pais unsuccessfully applied for disability

insurance benefits with the SSA. Nearly three years later, seeking

a   reversal   of   the   agency's   decision,     he   entered   into    a   fee

agreement that provided for contingent attorneys' fees -- to be

collected out of retroactive benefits awarded as a result of the

representation, should it be successful.             With the assistance of

counsel, it was:      In 2018, the district court ruled for Pais and

remanded the case to the agency for further proceedings, which

ultimately found Pais to be a person with a disability and thus

entitled to benefits.

           It was at this point that Pais and his counsel received

a Notice of Award (NOA) from the SSA.             On June 16, 2019, the SSA

issued an NOA notifying Pais that he was entitled to past-due

benefits, and that 25 percent of his benefits ($29,159.13) was

being withheld for potential attorneys' fees collectable under

                                     - 2 -
42 U.S.C. § 406.1     Soon after, Pais's counsel submitted timesheets

requesting legal fees collectable under § 406(a) -- that is, fees

for work done in administrative proceedings before the SSA.                  On

November 19, 2019, the agency approved an award of $7,091.03 for

such fees.

              Pais's counsel was far slower to petition for the fees

he was entitled to for his work before the district court.               Nearly

a year after issuing the NOA, on May 24, 2020, the SSA sent a

letter to Pais's attorney noting that the agency continued to

withhold the remaining $22,068.10 collectable under § 406(b) for

such work.      On October 26, 2020, the agency sent another letter

regarding the withheld funds, with additional language stating

that the agency "will certify for payment to the claimant all

withheld benefits unless [his attorney] file[s] a petition for

approval of a fee within 20 days from the date of this letter, or

a   written    request   for       an   extension   of   time."   The    agency

subsequently     received      a    letter   from   Pais's   attorney,    dated

November 3, 2020, advising of his "intention to file a motion with

the District Court for approval [of] 406(b) fees," requesting "an

extension of time" to do so, and stating that he expected to file

it "shortly."       No immediate action followed, but the agency

      1As explained more fully below, 42 U.S.C. § 406 outlines what
fees an attorney may collect after successfully representing a
claimant in an action for past-due benefits from the SSA.

                                        - 3 -
nonetheless sent two more notices on April 25, 2021, and August

11,   2021,    identifying     the    withheld      funds   and     threatening

distribution to the claimant unless counsel filed a petition or

moved for an extension.

            On August 13, 2021, two days after receiving the last

letter and more than two years after receiving the NOA outlining

Pais's    past-due     benefits   award    and     the   funds    withheld    for

attorneys' fees, Pais's attorney at long last filed a motion in

the district court requesting the § 406(b) fees.                 In the motion,

Pais's attorney observed that the statute does not contain a fixed

time for filing a § 406(b) petition and pointed out that the filing

was made within the 20-day deadline included in the SSA's latest

letter.     In response, the agency cried foul and objected to the

motion as untimely filed.           Pais's counsel then objected to the

objection     and    cited   "clerical       and    logistical     difficulties

(including    moving    office[s]    and   the     [COVID-19]    pandemic)"    as

reasons for the filing delay.

            Unmoved by the excuses offered by Pais's attorney, the

district court denied the fee request as untimely.               In a September

23, 2021 decision, the court specifically acknowledged Pais's

attorney's argument that § 406(b) does not contain a time limit

for filing fee applications, and referenced the lack of guidance

from the First Circuit on the appropriate deadline for filing a

§ 406(b) fee petition.       But after reviewing the varying approaches

                                     - 4 -
taken by our sister circuits, it concluded that such a motion must

be filed within a reasonable time of the agency's decision awarding

benefits, and that what amounts to a reasonable delay in filing

depends on the particular circumstances of each case, including

any explanation for the delay.          After rejecting Pais's counsel's

explanation for the two-year gap between the NOA and his § 406(b)

petition, the court put the kibosh on the fee request.                  Pais's

attorney timely appealed and here we are.

                                II.   ANALYSIS

          The      district   court's    "discretion     in   respect   to   fee

awards is extremely broad" and our review of such decisions is

highly deferential.         Lipsett v. Blanco, 975 F.2d 934, 937 (1st

Cir. 1992).   When reviewing an award of attorneys' fees, "the role

of an appellate court is to review for errors of law or abuse of

discretion." Furtado v. Bishop, 635 F.2d 915, 920 (1st Cir. 1980).

Therefore,    we   review     the   district   court's    interpretation     of

§ 406(b) and subsequent adoption of the "reasonable time" standard

for errors of law, and review the district court's application of

the standard for abuse of discretion.

   A.   Attorneys' Fees in Social Security Cases:             An Overview

          We begin with a quick overview of 42 U.S.C. § 406, which

provides the statutory framework for attorneys to seek fees for

their representation of claimants in actions for past-due Social

Security benefits.     "The statute deals with the administrative and

                                      - 5 -
judicial review stages discretely:     § 406(a) governs fees for

representation in administrative proceedings; § 406(b) controls

fees for representation in court."     Gisbrecht v. Barnhart, 535

U.S. 789, 794 (2002).     For fees under § 406(a), attorneys may

petition the agency directly, and awards are based on several

factors.   See 20 CFR § 404.1725(b).

           In contrast, § 406(b) authorizes courts to grant fees

for work performed before them that results in a favorable outcome

for the claimant.   Specifically, § 406(b)(1)(A) states:   "Whenever

a court renders a judgment favorable to a claimant . . . 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[.]"     The statute authorizes the SSA to

withhold 25 percent of the claimant's past-due benefits for such

fees and sets this amount as the limit a court may award.2      Id.

("[T]he Commissioner of Social Security may . . . certify the

amount of such fee for payment to such attorney out of, and not in

     2 Additionally, the Equal Access to Justice Act (EAJA),
28 U.S.C. § 2412, authorizes courts to grant attorneys' fees when
the government's denial of benefits is not "substantially
justified." Congress has harmonized EAJA and § 406(b) fees --
"[f]ee awards may be made under both prescriptions, but the
claimant's attorney must refund to the claimant the amount of the
smaller fee." Gisbrecht, 535 U.S. at 796. In the instant case,
the district court awarded EAJA fees totaling $3,618.15 shortly
after ordering the remand to the SSA.

                               - 6 -
addition to, the amount of such past-due benefits.        In case of any

such judgment, no other fee may be payable or certified for payment

for such representation[.]").

          The Supreme Court has also held that § 406(b) works in

tandem with representative fee arrangements, stating:            "[Section]

406(b) does not displace contingent-fee agreements as the primary

means by which fees are set for successfully representing Social

Security benefits claimants in court.       Rather, § 406(b) calls for

court review of such arrangements as an independent check, to

assure that they yield reasonable results in particular cases."3

Gisbrecht, 535 U.S. at 807.

         B.   The Proper Standard for § 406(b) Timeliness

          With this statutory scheme in mind, we proceed to the

issue of first impression in this circuit presented by this case:

What is the appropriate timeliness standard for fee petitions

brought under § 406(b)?    As discussed below, we believe that the

"reasonable   time"   standard   applied   to   Federal   Rule    of   Civil

Procedure 60(b) motions should also govern the timeliness of

§ 406(b) petitions.

     3 Here, Pais's fee agreement mirrors the statute and provides
that counsel may apply to the court for the maximum fees allowable
under § 406(b).

                                 - 7 -
          1.   The Circuit Split

          To begin and as previously noted, § 406(b) does not

contain a time limit for fee requests.      Federal Rule of Civil

Procedure 54(d)(2)(B)(i), however, states that "[u]nless a statute

or a court order provides otherwise, [a motion for attorneys' fees]

must . . . be filed no later than 14 days after the entry of

judgment[.]"    This timeline presents a significant issue for

attorneys seeking to collect § 406(b) fees:     Following a remand

from the district court, an agency's determination will rarely, if

ever, be completed within 14 days.     Pais's attorney emphasizes

this point, highlighting the unworkability of a 14-day deadline

for district court fees contingent upon agency determinations made

on an entirely separate timeline.   He urges us then to eschew this

rule in favor of the flexibility afforded by the "reasonable time"

standard applied to motions filed under Rule 60(b)(6).4    For its

part, the SSA has taken an agnostic stance on this issue and

declined to suggest a specific rule for this court to adopt.    As

the SSA sees it, the fee petition here was untimely regardless of

the standard applied.

     4 Under Rule 60(b)(6), a party may move for relief "from a
final judgment, order, or proceeding" for "any other reason that
justifies relief." Federal Rule of Civil Procedure 60(c) states
that "[a] motion under Rule 60(b) must be made within a reasonable
time" -- placing a one-year outer bound on reasonableness for
certain motions made under the Rule (Rule 60(b)(1-3)), but not
others (Rule 60(b)(4-6)).

                               - 8 -
           The minority of our sister circuits to address this

question have adopted the "reasonable time" standard.          In McGraw

v. Barnhart, the Tenth Circuit followed this course, ruling that

"[a] motion for an award of fees under § 406(b)(1) should be filed

within a reasonable time of the Commissioner's decision awarding

benefits."   450 F.3d 493, 505 (10th Cir. 2006).       Highlighting Rule

60(b) as the "grand reservoir of equitable power to do justice in

a particular case," the circuit court held that substantial justice

would be served by allowing counsel to seek § 406(b) fees under

that Rule's authority. Id. (quoting Pelican Prod. Corp. v. Marino,

893 F.2d 1143, 1147 (10th Cir. 1990)).         In so ruling, the Tenth

Circuit's approach stands in contrast with every other circuit

that has considered this question since the Federal Rules were

amended to include Rule 54(d)(2)'s 14-day deadline.5

           Turning to the other circuits (the Second, Third, Fifth,

and   Eleventh   Circuits)   that    have   mulled   the   timely   filing

conundrum, they have chosen to apply Rule 54(d)(2)'s more rigid

14-day deadline to § 406(b) petitions.        See Sinkler v. Berryhill,

932 F.3d 83, 87 (2d Cir. 2019); Walker v. Astrue, 593 F.3d 274,

276 (3d Cir. 2010); Pierce v. Barnhart, 440 F.3d 657, 663 (5th

      5In Smith v. Bowen, 815 F.2d 1152, 1156 (7th Cir. 1987),
which the district court in the instant case cited in support of
adopting the standard, the Seventh Circuit also applied a
"reasonable time" standard to § 406(b) petitions. However, this
was prior to the 1993 amendment of Rule 54, which established the
14-day deadline.

                                    - 9 -
Cir. 2006); Bergen v. Taylor, 454 F.3d 1273, 1277 (11th Cir. 2006).

And they have done so despite the deadline's imperfect fit with

the timing of SSA determinations made following a district court

remand.   These courts have ranged in their approach to grappling

with the disconnect between the timelines of the district court

and the SSA.     The Second and Third Circuits have relied on

equitable tolling to harmonize the process -- pushing forward the

triggering event for Rule 54(d)(2)'s timeline from the date of the

district court's remand to the date of the agency's subsequent

determination (as marked by the issuance of an NOA).         Sinkler, 932

F.3d at 87-88; Walker, 593 F.3d at 280.       The Second Circuit, along

with the Fifth and Eleventh Circuits, has also highlighted the

discretionary power of the district court to set alternative

deadlines as justice requires.       Sinkler, 932 F.3d at 89; Pierce,

440 F.3d at 664; Bergen, 454 F.3d at 1278 n.2.

          2.   The Use of Rule 60(b)(6)

          We   are   inclined   to   agree   with   the   Tenth   Circuit's

reasoning on this issue, and therefore adopt Rule 60(b)(6)'s

reasonable time standard for determining the timeliness of § 406(b)

petitions made in this circuit.        Rule 60(b) empowers courts to

relieve a party from a final judgment on various grounds, including

"any other reason justifying relief."        Fed. R. Civ. P. 60(b)(6).

Like the Tenth Circuit, we have referred to Rule 60(b)(6) as a

district court's "residual reservoir of equitable power to grant

                                 - 10 -
discretionary relief" -- allowing it "to relieve a party from a

final judgment where such relief is appropriate to accomplish

justice[.]"      Paul Revere Variable Annuity Ins. Co. v. Zang, 248

F.3d 1, 5 (1st Cir. 2001).

            In   scanning   the    out-of-circuit     precedent,       we   have

observed that in practice, accomplishing justice in most § 406(b)

cases seems to inevitably require some exercise of the district

court's discretion and powers in equity.              Some of the circuits

that have adopted the Rule 54(d)(2) deadline have effectively

conceded as much, by tolling the Rule's triggering event to the

date of the agency's NOA.         As the Tenth Circuit pointed out in

McGraw, this approach seems "contrary to the plain language of

[Rule 54(d)(2)], which states that the motion must be filed no

later than 14 days after entry of judgment.            It appears that the

term 'judgment' refers to the judgment of the district court."

McGraw, 450 F.3d at 504 (citations and quotations omitted); see

Melkonyan v. Sullivan, 501 U.S. 89, 96 (1991) ("Congress' use of

'judgment' in [a fee-shifting statute] refers to judgments entered

by a court of law, and does not encompass decisions rendered by an

administrative     agency.").       Other    solutions      proposed   by   the

circuits,   such    as   urging   district   courts    to    set   alternative

                                   - 11 -
deadlines as necessary, no less involve the use of the court's

discretion to set aside Rule 54(d)(2)'s suggested timeline.6

          Additionally, we find the concerns raised by our sister

courts that have rejected the use of Rule 60(b) here to be

unpersuasive.    In rejecting this analytical pathway, both the

Second and Third Circuits have cautioned that there is "little

support" in law for the Rule 60(b) approach -- even arguing that

this pathway appears to "conflict in principle with Supreme Court

jurisprudence   that    instructs     that   a   post-judgment      motion    for

attorney fees is not properly asserted as a motion to amend or

alter judgment."       Sinkler, 932 F.3d at 87 (quoting Walker, 593

F.3d at 279).

          We read the relevant jurisprudence that they cite to --

White v. N.     H.    Dep't of Emp. Sec., 455 U.S. 445 (1982)                 --

differently.     In    White,   the   Court      emphasized   the    nature   of

attorneys' fees requested under 42 U.S.C. § 1988 as separate from

and collateral to the relevant judgment by a court.                 In support,

the Court quoted a prior observation by the Fifth Circuit that

"[a] motion for attorney's fees is unlike a motion to alter or

amend a judgment.     It does not imply a change in the judgment, but

merely seeks what is due because of the judgment."             Id., 455 U.S.

     6  Which the Rule allows for.        See Fed. R. Civ. P.
54(d)(2)(B)(i) ("Unless a statute or a court order provides
otherwise, the motion must: (i) be filed no later than 14 days
after the entry of judgment . . . ." (emphasis added)).

                                    - 12 -
at 452 (quoting Knighton v. Watkins, 616 F.2d 795, 797 (5th Cir.

1980)).

           We believe that this conception of attorneys' fees does

not apply to the plain language and statutory design of § 406(b).

Unlike some of the other federal statutes that allow for attorneys'

fees based on a court's discretion, § 406(b) implies that the fees

are awarded as a part of a district court's judgment for the

claimant, rather than as a separate judgment allowing the party to

recuperate      costs    underlying    the    action.       Compare    42   U.S.C.

§ 406(b)(1)(A) ("[T]he court may determine and allow as part of

its judgment a reasonable fee for such representation . . . ."

(emphasis added)) with 42 U.S.C. § 1988 ("[T]he court, in its

discretion, may allow the prevailing party . . . a reasonable

attorney's fee as part of the costs . . . .") and 28 U.S.C. § 2412

("[A] court may award reasonable fees and expenses of attorneys,

in   addition    to     the   costs   which    may    be   awarded   pursuant   to

subsection (a) [which authorizes courts to award a judgment for

other costs incurred in the litigation] . . . .").                    The Supreme

Court implied a similar distinction in Gibsbrecht, stating that

"[f]ees shifted to the losing party . . . are not at issue" in §

406(b) petitions.        535 U.S. at 802.       Unlike fee-shifting statutes

like 42 U.S.C. § 1988 and 28 U.S.C. § 2412, the Court noted,

"[s]ection 406(b) is of another genre:               It authorizes fees payable

from the successful party's recovery."               Id.

                                      - 13 -
            Indeed, given that § 406(b) provides for the fees to be

collected directly from a claimant's subsequently awarded past-

due benefits, it seems sensible to understand the fees as a

conditional part of the court's judgment. The statute states that,

should a claimant be successful before the agency on remand, the

agency   may   withhold    a   portion   of    the   past-due    benefits    for

attorneys' fees in case they are awarded by the court.                 42 U.S.C.

§ 406(b)(1)(A) ("[T]he Commissioner of Social Security may . . .

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 such cases, we see no reason why it would be

inappropriate for a district court to, based on the discretion

formalized in Rule 60(b)(6), amend the judgment in order to award

§ 406(b) fees.         Unlike the fee petitions contemplated by the

Supreme Court in White, § 406(b) motions do not "merely seek[]

what is due because of the judgment" -- the fees are not due

because of the district court's judgment ordering a remand.                  See

White, 455 U.S. at 452.        Rather, such a motion "impl[ies] a change

in the judgment."        See id.    Now that the condition of success

before the agency on remand has been met, the district court may

amend its judgment to award fees.

            Admittedly, we have historically set a high bar for Rule

60(b)(6) motions, reasoning that "'[t]here must be an end to

litigation someday,' and therefore district courts must weigh the

                                    - 14 -
reasons advanced for reopening the judgment against the desire to

achieve finality in litigation."       Paul Revere Variable Annuity

Ins. Co., 248 F.3d at 5-6 (quoting Ackermann v. United States, 340

U.S. 193, 198 (1950)) (alteration in original).     However, unlike

most cases where a final judgment is disturbed, here it is clear

to all parties that, in the event of success before the agency on

remand, a subsequent amendment to the district court's judgment to

award attorneys' fees is highly likely.       Indeed, given that a

successful claimant may not receive their full past-due benefits

until the question of attorneys' fees is resolved, here it seems

necessary for a court to in essence reopen the judgment (or

definitively decline to do so, by denying a § 406(b) petition) in

order to achieve finality for all parties in the matter.7

          Therefore, we see no reason to fashion a unique rule to

direct our district courts, given that Rule 60(b)(6) provides a

clear enough guidepost for them.    Accordingly, we hold that the

district court applied the correct rule, Rule 60(b)'s "reasonable

time" standard, when assessing the timeliness of Pais's attorney's

§ 406(b) fee petition.   Under this standard, district courts must

determine whether any delay was reasonable based on the particular

     7 While the "matter" extends beyond the underlying suit
between a claimant and the SSA (and now mainly concerns the
claimant and their counsel), the SSA remains tied to the litigation
based on its role in withholding and ultimately certifying any
fees to be paid out to the attorney.

                              - 15 -
circumstances of each case, including any explanation for whatever

delay may be at issue.8    Once the NOA is issued, the principal

basis for withholding a request for fees will usually disappear.

Because the delay here was unreasonable by any measure, today we

need not decide the outer bounds of what constitutes a reasonable

delay.9

          Further, we agree with the district court that the

"triggering event" from which reasonability should be assessed is

the issuance of the NOA, not the court's judgment ordering the

underlying remand.   The availability of § 406(b) fees is premised

on the SSA's subsequent determination of past-due benefits, which

is established by the NOA.     Accordingly, when determining the

timeliness of a § 406(b) petition, courts should assess whether a

reasonable time has elapsed since it was issued by the agency.

     8 Naturally, these circumstances will also include the local
rules of the district where the petition was filed. Currently,
the District of Maine is the only court within this circuit to
have an applicable rule. See Me. Loc. R. 54.2 ("[A]ny application
for fees under 42 U.S.C. §[]406(b) . . . shall be filed within 30
days of the date of [the NOA].")
     9 Unlike Pais's counsel, we do not understand the district
court to have applied a one-year per se time limit on
reasonableness. Because this standard is based on Rule 60(b)(6),
which is not subject to that outside limit, we also decline to do
so. See Fed. R. Civ. P. 60(c)(1) ("A motion under Rule 60(b) must
be made within a reasonable time--and for reasons (1), (2), and
(3) no more than a year after the entry of the judgment . . . .").

                              - 16 -
                    C.    The District Court's Holding

              With that threshold question out of the way, we turn to

the district court's application of the "reasonable time" standard

in this case and review it for an abuse of discretion.            See Ramos

v. Barnhart, 103 F. App'x 677, 678 (1st Cir. 2004).

              We conclude that the district court did not abuse its

discretion in denying the petition.             Simply put, we are hard

pressed to understand how a 26-month gap between the SSA's issuance

of Pais's NOA and his attorney's § 406(b) petition could possibly

be considered reasonable -- especially given that Pais's attorney

failed   to    provide    any   meaningful   explanation   for   the   delay.

Counsel counters that his timing was reasonable in light of the

multiple notices sent by the SSA after the NOA, each of which

included a new 20-day deadline for filing a petition and indicated

that the SSA was still withholding the funds.

              While we appreciate the confusion that these notices may

have caused, they are immaterial.        As the Supreme Court has noted,

"the Commissioner of Social Security . . . has no direct financial

stake in the answer to the § 406(b) question; instead, she plays

a part in the fee determination resembling that of a trustee for

the claimants."          Gisbrecht, 535 U.S. at 798 n.6.          This role

underscores the limited authority of the SSA here -- § 406(b)

awards are made at the discretion of the court, and the SSA does

not have the authority to acquiesce to delays or extend the court's

                                    - 17 -
timeline for accepting such petitions.       For a district court, the

sole question for assessing timeliness is whether counsel filed

his § 406(b) petition within a "reasonable time," separate and

apart from any agency actions taken after issuing the NOA that did

not affect the claimant's past-due benefits.

          Here, the NOA contained all the necessary information

that counsel needed to file a petition for attorneys' fees.      Given

that Pais's attorney failed to file his § 406(b) petition in a

timely manner, the district court did not err in denying the

eventual submission.10   Like the court, because we consider the fee

petition untimely, we need not address the reasonableness of the

amount requested.

                          III.    CONCLUSION

          Summing up, for the reasons stated above, we hold that

Rule 60(b)'s "reasonable time" standard, measured from the SSA's

issuance of an NOA, should govern the timeliness of attorneys' fee

petitions submitted under § 406(b).       Accordingly, we hold that the

     10 We also find Pais's attorney's theory of detrimental
reliance to be unpersuasive. The doctrine allows a party to be
estopped from advancing an argument if the opposing party can show
"that it relied on its adversary's conduct in such a manner as to
change [its] position for the worse." Mimiya Hosp., Inc. SNF v.
U.S. Dep't Of Health And Hum. Servs., 331 F.3d 178, 182 (1st Cir.
2003) (quoting Heckler v. Cmty. Health Servs., 467 U.S. 51, 59
(1984)) (alteration in original). Pais's attorney does not, and
cannot, demonstrate how his reliance on the SSA's subsequent
notices changed his position from one of filing in a timely manner
to one of filing after unreasonable delay.

                                 - 18 -
district court did not abuse its discretion when applying the

standard, and therefore affirm.

                             - 19 -