United States District Court, D. Nebraska
NIKKI J. HERNANDEZ, Plaintiff,
ANDREW M. SAUL, Acting Commissioner of Social Security; Defendant.
MEMORANDUM AND 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. 23, 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 $2, 441.52, representing 11 hours of work at the
rate of $201.60 per hour for work performed in 2018 and 1.1
hours of worked in the amount of $203.56 per hour for work
performed in for 2019. The plaintiff also seeks a payment of
$6, 000.00 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 Nos. 21 and 22,
Memorandum and Order and Judgment. The Court found the
Administrative Law Judge had erred by failing to properly
assess the weight of the treating or consulting physician
opinions, and he failed to properly evaluate and give
appropriate hypothetical questions to the vocational expert.
Filing No. 21, Memorandum and Order.
support of her motion, the plaintiff has shown that plaintiff
and attorneys 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 June 17, 2019, plaintiff's
counsel received a notice that $29, 191.90 was due to
plaintiff from February 2015-May 2019, payable in up to 3
installments, six months apart. Filing No. 26-2.
Plaintiff's counsel has requested $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 who will provide the lesser of the 406(b) fee
and the EAJA fee to Ms. Hernandez and then disburse the
amount to Mr. Wes Kappelman, of Kappelman Law Firm 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
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. & 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 States”).
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 ...