United States District Court, D. Nebraska
LORI D. SHENK, Plaintiff,
NANCY A. BERRYHILL, Acting Commissioner of Social Security; Defendant.
MEMORANDUM & ORDER
F. Bataillon, Senior United States District Judge
matter is before the Court on the plaintiff's Motion for
attorney fees under the Equal Access to Justice Act (EAJA),
28 U.S.C. § 2412, Filing No. 24, and her motion for
attorney fees under 42 U.S.C. § 406(b), Filing No. 26.
The plaintiff requests attorney fees under the EAJA in the
amount of $4, 532.78, representing 23 hours of work at the
rate of $196.79 per hour for work performed in 2017 and
$201.51 per hour for work performed in for
2018. The plaintiff also seeks a payment of $7,
529.25 under 42 U.S.C. § 406(b)(1).
an action for judicial review of a final decision of the
Commissioner of the Social Security Administration denying
the plaintiff's application for Social Security
Disability (“Disability”) and Supplemental
Security Income (“SSI”) benefits under pursuant
42 U.S.C. §405(g). The Court reversed The
Commissioner's decision. Filing No. 21, Memorandum and
Order at 17. The Court found the Administrative Law Judge had
erred by improperly discounting Plaintiff's subjective
complaints, failing to properly assess the weight of the
treating or consulting physician opinions, and asserting his
own medically unsupported findings. Filing No. 21, Memorandum
and Order at 14-16. The Court found controlling weight should
have been afforded to the treating physician opinion and
ordered benefits awarded to the plaintiff. Id. at
support of her motion, the plaintiff has shown that on or
about July 24, 2017, plaintiff Lori Shenk and attorneys Sean
Cuddigan and Thomas Krause entered into a fee agreement
providing for a contingency fee of twenty-five percent of
back benefits and assigning that award to plaintiff's
counsel. Filing No. 26-1, Ex. A, Fee Agreement. On January
12, 2019, plaintiff's counsel received a notice that $13,
529.25 has been withheld from back benefits to cover the fee
of up to twenty-five percent of back benefits. Filing No.
26-2, Ex. B, Notice of Award. Plaintiff's counsel has
received, or expects to receive, $6, 000 for work performed
before the Social Security Administration pursuant to 42
U.S.C. § 406(a). Counsel agrees, if the request for fees
is granted, to refund to the claimant the amount of the
smaller of the EAJA fee or the 42 U.S.C. §406(b) fee
under the Equal Access to Justice Act.
plaintiff requests that Social Security should direct both
fee awards to Mr. Cuddigan who will provide the lesser of the
406(b) fee and the EAJA fee to Ms. Shenk and then disburse
the amount to Mr. Krause owed per the fee agreement.
Defendant has no objection to the EAJA request or to the
Court making payment directly to plaintiff's counsel and
it takes no position on the reasonableness of the
plaintiff's request for fees under § 406(b).
EAJA provides for the award of attorney fees if: (1) the
person is a prevailing party; (2) the individual's net
worth did not exceed two million dollars at the time the
civil action was filed; and (3) the fees and expenses were
“incurred by that party in [the] civil action” in
which it prevailed. 28 U.S.C. § 2412(d)(1)(A)-(2)(B);
United States Sec. and Exch. Comm'n v. Zahareas,
374 F.3d 624, 630 (8th Cir. 2004). Courts called upon to
interpret the EAJA should endeavor to interpret the fee
statute in light of its purpose, which is to “eliminate
for the average person the financial disincentive to
challenge unreasonable governmental actions.”
Astrue v. Ratliff, 560 U.S. 586, 2530 (2010)
(Sotomayor, J., concurring).
prevailing Social Security claimant may recover fees under
the EAJA if the Commissioner's position was not
substantially justified. Goad v. Barnhart, 398 F.3d
1021, 1025 (8th Cir. 2005). The burden of establishing that
the position of the United States was substantially justified
“must be shouldered by the Government.”
Scarborough v. Principi, 541 U.S. 401, 414 (2004).
To establish substantial justification, the Commissioner must
show that the denial of benefits had “a reasonable
basis in law and fact.” Goad, 398 F.3d at 1025
(citing Brouwers v. Bowen, 823 F.2d 273, 275 (8th
Cir. 1987)). Where “an EAJA petitioner presents
uncontested proof of an increase in the cost of living
sufficient to justify hourly attorney's fees of more than
[the amount specified in the EAJA], enhanced fees should be
awarded.” Johnson v. Sullivan, 919 F.2d 503,
505 (8th Cir.1990); see 28 U.S.C. §
plaintiff herself is the “prevailing party”
contemplated by the EAJA. See Astrue v. Ratliff, 560
U.S. 586, 591-94 (2010). However, lower courts, including
those in this district, have continued to order payment of
awards directly to a plaintiff's attorney, subject to
offset for pre-existing debt to the Federal Government, where
a valid assignment of the award of attorney's fees from
the plaintiff to plaintiff's counsel is in effect.
See Matthews-Sheets v. Astrue, 653 F.3d
560, 565 (7th Cir. 2011), overruled on other grounds
by Sprinkle v. Colvin, 777 F.3d 421, 427-28
(7th Cir. 2015); Alexander v. Colvin, No.
4:14CV3194, 2015 WL 5536729, at *2 (D. Neb. Sept. 18, 2015);
Gors v. Colvin, Civ. No. 12-4162, 2013 WL 960230, at
*3 (D.S.D. March 12, 2015) (“Post-Ratliff the
approach of most courts has been to honor [client assignments
of EAJA fees to attorneys] in the absence of the
litigant's pre-existing debt to the United
also seeks an award of attorney fees pursuant to 42 U.S.C.
§ 406(b) in the amount of twenty-five percent of
plaintiff's past-due benefit award. The Social Security
Act authorizes a federal district court to award attorney
fees for representation before the court under 42 U.S.C.
§ 406(b). Congress enacted § 406(b) to
“protect claimants against inordinately large fees and
also to ensure that attorneys representing successful
claimants would not risk nonpayment of [appropriate]
fees.” Gisbrecht v. Barnhart, 535 U.S. 789,
805 (2002) (internal quotation marks omitted). Fees under
§ 406(b) satisfy a client's obligation to counsel
and, therefore, attorney fees are withheld by the
Commissioner and paid directly to the attorney out of
past-due benefits awarded. 42 U.S.C. § 406(b); 20 C.F.R.
§ 404.1720(b)(4) (2011).
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.” Gisbrecht, 535 U.S. at 807. However, a
contingency-fee agreement that provides for fees in excess of
the boundary imposed by Congress, twenty-five percent of
past-due benefits, is per se unreasonable.
See id.; 42 U.S.C. § 406(b)(1)(A). If
the contingency-fee agreement is at or below the twenty-five
percent boundary, the attorney for the successful claimant
must establish that the fee sought is reasonable in
proportion to the services rendered. Gisbrecht, 535
U.S. at 807.
courts are responsible for conducting an “independent
check” to ensure the fee award is reasonable.
Id. A court should determine whether a downward
adjustment of an attorney's recovery is appropriate based
on the character of the representation and the results the
attorney achieved. Id. at 808. To avoid a windfall
to a successful claimant's attorney, the court should
make a downward adjustment if the award of benefits is large
in comparison to the amount of time counsel spent on the
case. Id.; Rodriquez v. Bowen, 865 F.2d
739, 747 (6th Cir. 1989) (“Where a case has been
submitted on boilerplate pleadings, in which no issues of
material fact are present and where no legal research is
apparent, the benchmark twenty-five percent of awards fee
would obviously be inappropriate”). Courts may also
reduce an award in situations “occasioned by improper
conduct or ineffectiveness of counsel, ” such as where
an attorney delays a case to increase the attorney's
share of “past-due” benefits. Rodriquez,
865 F.2d at 746; Gisbrecht, 535 U.S. at 808.
may award attorney fees to prevailing claimants and their
attorneys under both the EAJA and § 406(b); however, a
double recovery is not permitted. Gisbrecht, 535
U.S. at 796. “EAJA fees and fees available under §
406 are two different kinds of fees that must be separately
awarded.” Frazier v. Apfel, 240 F.3d 1284,
1286 (10th ...