Baron v. Astrue
311 F. Supp. 3d 633
| S.D. Ill. | 2018Background
- Plaintiff Sandra Baron sought judicial review of an adverse Social Security determination; case was remanded and the SSA subsequently awarded past-due benefits.
- The SSA withheld a total of $97,960.75 (25% of past-due benefits across claimant and auxiliary beneficiaries) as potential attorney's fees.
- Counsel already received $40,205.95 for administrative-level representation, leaving $57,754.80 withheld for potential § 406(b) fees for federal-court work; counsel asks for that full amount based on a 25% contingent-fee agreement.
- Counsel previously obtained an $11,382.07 EAJA award and holds about $12,152 in escrow (paid by the client due to an SSA withholding error for an auxiliary beneficiary).
- Magistrate Judge Gorenstein recommended awarding the $57,754.80 § 406(b) fee and ordering counsel to refund the EAJA award and the escrow; Judge Koeltl adopted the Report as well reasoned and correct.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a § 406(b) fee of $57,754.80 is reasonable | 25% contingent-fee agreement; counsel spent 81.17 hours and achieved full relief after remand | SSA did not object to the Report’s recommendation; SSA identified amounts withheld and awarded administratively | Court approved the $57,754.80 § 406(b) award as reasonable considering results, effort, efficiency, and contingency risk |
| Whether counsel must refund the EAJA award ($11,382.07) to the client | Counsel’s contingent agreement yields larger § 406(b) fee; EAJA award was separately obtained | Under Gisbrecht, counsel must refund the smaller EAJA award to the claimant when § 406(b) fees are awarded | Court ordered counsel to return the $11,382.07 EAJA award to Baron |
| Whether escrow ($12,152) held for auxiliary beneficiary should be returned to the client | Escrow was paid by client because SSA initially failed to withhold fees for an auxiliary beneficiary; retaining it would push counsel above 25% cap | Retaining escrow would result in fees exceeding the statutory 25% cap | Court ordered counsel to return the $12,152 escrow to Baron |
| Whether counsel unreasonably delayed or obtained a windfall warranting reduction | Counsel argues work was non-boilerplate, effective, and not dilatory; contingency risk justifies fee | No evidence SSA urged for reduction; parties did not object to Report | Court found no delay, no windfall, and declined to reduce the contingent fee |
Key Cases Cited
- Gisbrecht v. Barnhart, 535 U.S. 789 (2002) (sets standards for § 406(b) contingency-fee awards and requires refunding overlapping EAJA fees)
- Joslyn v. Barnhart, 389 F. Supp. 2d 454 (W.D.N.Y. 2005) (articulates factors for evaluating reasonableness of § 406(b) requests)
- Wells v. Sullivan, 907 F.2d 367 (2d Cir. 1990) (endorses deference to freely negotiated contingency agreements and risk-based compensation)
- Blizzard v. Astrue, 496 F. Supp. 2d 320 (S.D.N.Y. 2007) (framework for analyzing § 406(b) fee petitions in this district)
- Thomas v. Arn, 474 U.S. 140 (1985) (procedural rule on objections to magistrate judge reports)
- Wagner & Wagner, LLP v. Atkinson, Haskins, Nellis, Brittingham, Gladd & Carwile, P.C., 596 F.3d 84 (2d Cir. 2010) (procedural consequences of failing to timely object to a magistrate judge’s report)