United States District Court, W.D. Arkansas, Fayetteville Division
ERIN L. WIEDEMANN UNITED STATES MAGISTRATE JUDGE.
the Court is counsel's request for approval of
attorney's fees in the amount of $21, 009.50, pursuant to
42 U.S.C. § 406(b). (Doc. 26). Plaintiffs counsel
requests 25% of her past-due benefits based upon a
contingency-fee agreement. (Doc. 14, p. 19). Defendant does
not object to the award in this case, but suggests that the
fee request may be unreasonable. (Doc. 28).
Cheryl Ann Collins Stead appealed the Commissioner's
denial of benefits to this Court for the second time on
August 13, 2015.On March 15, 2016, this Court granted
Defendant's motion to remand and entered judgment
remanding Plaintiffs case to the Commissioner pursuant to
sentence four of 42 U.S.C. § 405(g) for further
proceedings. (Doc. 21). Plaintiffs counsel moved for an award
of fees under 28 U.S.C. § 2412, the Equal Access to
Justice Act (EAJA). (Doc. 22). Counsel's request was
granted on September 6, 2016, awarding fees and costs under
the EAJA in the amount of $4, 381.10, to be paid in addition
to, and not out of, any past-due benefits which Plaintiff may
be awarded in the future. (Doc. 25). Following remand,
Plaintiff was found to be entitled to benefits beginning in
July of 2007. (Doc. 27, p. 22).
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 addition to, the amount of claimant's past-due
1980, Congress enacted the Equal Access to Justice Act,
providing for fees payable by the United States. These fees
are determined not by a percentage 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.
of an attorney's fee under both 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 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, 625F.Supp. 228, 231 (S.D.Ohio
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
Cornelia 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
the district court may only award fees for work done before
it; it may not approve fees for work done before the
Commissioner. Gowen v. Bowen, 855 F.2d 613 (8th Cir.
1988); Fenix v. Finch, 436 F.2d 831 (8th Cir. 1971).
Court will now consider whether the contingent fee agreement
of twenty-five percent of Plaintiff s past-due benefits held
by the Commissioner, for work performed before this Court, is
406(b) "calls for court review of such arrangements as
an independent check, to assure that they yield reasonable
results in particular cases." Gisbrecht at 807.
In Gisbrecht, the Supreme Court also 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.
the Court must look to see whether the contingent-fee
agreement is within the twenty-five percent boundary. In the
present case, Plaintiff entered into a contingent-fee
agreement dated October 24, 2008. (Doc. 27, p. 19). This
Court finds that the written fee agreement in this case falls
within the statutory guidelines of not exceeding twenty-five
percent of the past-due benefits.
Court must now determine whether Plaintiffs attorney's
requested fee is reasonable compensation for his time spent
for work before this Court. "When considering a fee
award, the Court must balance two important policy concerns.
On one hand, fee awards should be substantial enough to
encourage attorneys to accept Social Security
cases-particularly when the attorney faces a risk of
nonpayment." Wallace v. Barnhart, 2004 WL
883447, at *3 (N.D. Iowa, 2004). "If remuneration is
insufficient, then deserving claimants will be unable to find
counsel." Id., quoting McDonald v.
Apfel, 2000 WL 744115, at * 1 (W.D. Mo. June 8, 2000).
On the other hand, attorneys representing disabled claimants
have a duty to protect the claimant's disability award.
Attorney fees awarded under § 406(b) are deducted from
the claimant's disability award. The duty of attorneys to
protect the interests of their clients remains throughout all
of the ...