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Jose C. v. Commissioner of Social Security

United States District Court, D. Vermont

July 9, 2019

Jose C., Plaintiff,
v.
Commissioner of Social Security, Defendant.

          OPINION AND ORDER (DOCS. 20, 24)

          JOHN M. CONROY, UNITED STATES MAGISTRATE JUDGE

         On March 31, 2019, the Social Security Administration (SSA) issued a notice of award to Plaintiff Jose C. advising him that he was entitled to disability benefits. (Doc. 20-2.) On April 3, 2019, Plaintiff's counsel, Craig Jarvis, properly filed a Motion for Attorney's Fees with this Court seeking attorney's fees due under a contingent fee agreement. (Doc. 20.) Subsequently, on May 16, 2019, Attorney Jarvis filed an Amended Motion for Attorney's Fees modifying the amount requested. (Doc. 24.) For the reasons set forth below, the Amended Motion for Attorney's Fees (Doc. 24) is GRANTED, in part, and the Motion for Attorney's Fees (Doc. 20) is DENIED as MOOT.

         Legal and Factual Background

         To contextualize the factual background, the Court briefly summarizes the statutory structure governing the fees an attorney may earn for representing a plaintiff claiming Social Security benefits. Section 406 of “the Social Security Act ‘discretely' addresses attorney's fees for the administrative and judicial-review stages: ‘§ 406(a) governs fees for representation in administrative proceedings; § 406(b) controls fees for representation in court.'” Culbertson v. Berryhill, 139 S.Ct. 517, 520 (2019) (quoting Gisbrecht v. Barnhart, 535 U.S. 789, 794 (2002)); see generally 42 U.S.C. § 406. In administrative proceedings, if the claimant has a fee agreement with his or her attorney, § 406(a)(2) caps the attorney's fees at the lesser of twenty-five percent of past-due benefits or a dollar amount currently set at $6, 000. See Maximum Dollar Limit in the Fee Agreement Process, 74 Fed. Reg. 6080 (2009). At the judicial-review stage in federal court, § 406(b)(1)(A) limits attorney's fees to no more than twenty-five percent of past-due benefits and allows the SSA to withhold past-due benefits to pay those fees.

         In addition to § 406 attorney's fees, under the Equal Access to Justice Act (EAJA), “a party prevailing against the United States in court, including a successful Social Security benefits claimant, may be awarded fees payable by the United States if the Government's position in the litigation was not ‘substantially justified.'” Gisbrecht, 535 U.S. at 796 (quoting 28 U.S.C. § 2412(d)(1)(A)). A fee award may be made under both 42 U.S.C. § 406(b) and the EAJA, but “the claimant's attorney must “refun[d] to the claimant the amount of the smaller fee.” Id. (quoting Act of Aug. 5, 1985, Pub. L. 99-80, § 3, 99 Stat. 186). In other words, an EAJA award offsets an award under § 406, so that a Social Security claimant may receive one-hundred percent of the past-due benefits. Id.

         With that legal structure in mind, the Court turns to facts of this case. On August 16, 2013, after the Commissioner denied Plaintiff's application for Disability Insurance Benefits (DIB) at all levels of administrative review, Attorney Jarvis timely filed a Complaint in this Court on behalf of Plaintiff. (See generally Doc. 1.) To compensate counsel for representing Plaintiff in federal court, [1] Plaintiff and Jarvis entered into a contingent fee agreement (the Federal Court Agreement). (See Doc. 20-4.) The Federal Court Agreement stated that Jarvis would “receive . . . an amount equal to twenty-five percent (25%) of all past-due benefits awarded to [Plaintiff].” (Id. ¶ 1.) In addition to past-due benefits, under the Federal Court Agreement, Plaintiff assigned Jarvis any attorney's fees awarded under the EAJA. (Id. ¶ 2.) The Federal Court Agreement specified, however, that “in no case shall the cumulative award of attorney fees exceed 25% of past-awarded benefits, unless EAJA fees alone would exceed that amount.” (Id. ¶ 3.) Finally, Plaintiff agreed to reimburse any costs and expenses that Jarvis paid on Plaintiff's behalf “from [Plaintiff's] share of the recovery.” (Id. ¶ 4.)

         On April 18, 2014, this Court reversed the Commissioner's position pursuant to sentence four of 42 U.S.C. § 405(g) and remanded the matter to the SSA for further administrative proceedings. (Doc. 13; see also Doc. 12.) Ten days later, in an April 28 Order, this Court awarded Plaintiff $5, 864.50 in attorney's fees under the EAJA. (Doc. 19.)

         On remand from this Court, the Commissioner again denied Plaintiff's DIB application, and he appealed to the U.S. District Court for the Southern District of Florida, where he then resided. (Doc. 20-9 at 1-4.) On August 23, 2017, the Florida district court remanded Plaintiff's case to the Commissioner for further proceedings. (Id. at 24.) Approximately two months later, on October 10, the Florida district court also awarded Plaintiff $5, 550 in attorney's fees under the EAJA. (Doc. 20-3 at 1.)

         Following the second remand to the Commissioner, on March 31, 2019, the SSA issued a notice of award to Plaintiff advising him that he was entitled to disability benefits. (Doc. 20-2.) The notice also informed him that the SSA had approved the fee agreement between Plaintiff and Attorney Jarvis governing Jarvis's representation before the SSA. (Id. at 3.) Pursuant to this agreement and in accordance with 42 U.S.C. § 406(a)(2), Jarvis could recover no more than $6, 000 in attorney's fees for the work that Jarvis had performed in the administrative proceedings before the SSA. (Id.); see also Maximum Dollar Limit in the Fee Agreement Process, 74 Fed. Reg. 6080 (2009).

         Further, the notice advised Plaintiff that he was entitled to past-due benefits of $78, 503.00 and that, pursuant to SSA policy, the SSA had withheld twenty-five percent of his past-due benefits to pay any fees due to Attorney Jarvis under the Federal Court Agreement. (Id. at 4.) Twenty-five percent of $78, 503.00 is $19, 625.75.

         Finally, as described above, in the course of these proceedings, Jarvis has been assigned a total of $11, 414.50 in EAJA fees pursuant to the terms of the Federal Court Agreement. (Doc. 20 at 2; Doc. 20-4 ¶ 2.) That total includes $5, 864.50 that this Court awarded on April 28, 2014 (Doc. 19) and $5, 550 that the Florida district court awarded on October 10, 2017. (Doc. 20-3 at 1.)

         In his original Motion for Attorney's Fees (Doc. 20), Jarvis asked this Court to enforce the Federal Court Agreement and to award 25% of the past-due benefits due to Plaintiff, or $19, 625.75 in attorney's fees, which is the maximum amount allowed under 42 U.S.C. § 406(b). (Doc. 20 at 3.) Jarvis also acknowledged in his Motion that he was required by law to reimburse the EAJA fees to Plaintiff (id.); however, Jarvis sought to deduct his unpaid legal expenses from the EAJA fees, as well as the $6, 000 in attorney's fees previously approved by the SSA under § 406(a). (Id.)

         The Acting Commissioner of Social Security filed a response advising this Court that the SSA did not object to Jarvis's request for $19, 625.75 in attorney's fees under § 406(b) because the amount requested did not exceed the statutory cap or constitute a windfall and there was no evidence of fraud or overreaching. (Doc. 22 at 1.) But the Acting Commissioner opposed Jarvis's request to deduct expenses from the EAJA fees, arguing instead that expenses are not contemplated under § 406(b) and, as a result, “the Court should order counsel to refund all EAJA fees directly to [Plaintiff], without reduction.” (Id.)

         Subsequently, Jarvis filed an Amended Motion for Attorney's Fees. (Doc. 24.) In his Amended Motion, Jarvis again asks this Court to enforce the Federal Court Agreement and to award $19, 625.75 in attorney's fees to Jarvis. (Id. at 1.) With regard to EAJA fees, however, Jarvis acknowledges that the Federal Court Agreement states that “in no case shall the cumulative award of attorney fees exceed 25% of past-awarded benefits, unless EAJA fees alone would exceed that amount.” (Doc. 20-4 ¶ 3.) Based on this contractual language capping attorney's fees, Jarvis no longer seeks to deduct $6, 000 in § 406(a) fees from the EAJA fees. (Doc. 24 at 1.) However, Jarvis still asks this Court for an ...


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