Conner v. Gardner, 11136.

• Decision Date: 25 July 1967
• Docket Number: No. 11136.,11136.
• Citation: 381 F.2d 497
• Parties: William Alvin CONNER, Appellee, v. John W. GARDNER, Secretary of Health, Education and Welfare, Appellant.
• Court: U.S. Court of Appeals — Fourth Circuit

381 F.2d 497 (1967)

William Alvin CONNER, Appellee, v. John W. GARDNER, Secretary of Health, Education and Welfare, Appellant.

No. 11136.

United States Court of Appeals Fourth Circuit.

Argued May 4, 1967.

Decided July 25, 1967.

Morton Hollander, Attorney, Department of Justice (Barefoot Sanders, Asst. Atty. Gen., and William Kanter, Attorney, Department of Justice, and Thomas B. Mason, U. S. Atty., on brief), for appellant.

Ralph Masinter, Roanoke, Va., for appellee.

Before BOREMAN, WINTER and CRAVEN, Circuit Judges.

BOREMAN, Circuit Judge:

The sole question on this appeal is whether an attorney who represented an allegedly disabled person in seeking review in the District Court of the denial of Social Security benefits by the Secretary of Health, Education and Welfare may be awarded a counsel fee by that court where no judgment has been entered specifically awarding benefits but the case is remanded to the Secretary who, after a hearing on new evidence, awards benefits and an attorney's fee.

Claimant William Alvin Conner (hereinafter Conner or claimant) filed an application for disability benefits with the Department of Health, Education and Welfare on December 24, 1963, alleging that he had been unable to work since January 25, 1962. On February 18, 1964, Conner was informed that his application had been denied. His request for reconsideration was likewise denied. On October 1, 1964, Conner retained Attorney Ralph Masinter of Roanoke, Virginia, to represent him. Upon claimant's petition, filed by counsel, a new hearing of the claim was had on January 7, 1965. On February 5, 1965, the Hearing Examiner ruled that claimant was not entitled to benefits and the Appeals Council affirmed on March 1, 1965.

On March 12, 1965, claimant filed a complaint in the United States District Court seeking review of the Secretary's decision. Counsel held many conferences with the United States Attorney and with the District Judge on the subject matter of this complaint. At the same time he requested that the Appeals Council seek a remand of the case for an evaluation of new medical evidence with respect to surgery which claimant had undergone.

On October 19, 1965, at claimant's request, the District Court entered an order remanding the case to the Appeals Council, without prejudice, for a hearing on this new evidence. After hearing, the Examiner recommended that claimant be entitled to full disability benefits retroactive to July 7, 1964. Claimant then appealed this decision to the Appeals Council which modified the ruling by awarding him total disability benefits retroactive to January 25, 1962.

Conner had agreed to pay counsel a contingent fee in the amount of one-third of the benefits which might be awarded plus disbursements. The past-due benefits amounted to $9,220.80. Counsel had claimant's checks cashed and withheld one-third, advising claimant and the Appeals Council that he would hold the proceeds of the checks in escrow pending a decision as to the amount of his fee.

The Appeals Council responded that the usual fee was $50.00 unless a larger fee could be justified. The attorney then furnished to the Appeals Council a detailed statement of the time spent on claimant's case, which included 140 hours' work before the Social Security division, and 22 hours of work in the District Court. On August 31, 1966, the Appeals Council awarded counsel a fee in the amount of $1,000.00 for services rendered in the proceedings before the Department. Counsel then made application to the District Court for additional fees which would compensate him for the time spent in the proceedings in court. The District Court awarded counsel an additional fee of $844.16. The Secretary appeals from that decision, contending that the District Court was without authority to award counsel fees when it did not enter a judgment awarding benefits. We affirm the judgment below.

Prior to the enactment of the 1965 amendments, the Social Security Act made no provision for the payment of fees to attorneys rendering services in the courts. However, the amendment to section 206 of the Act, reproduced in the margin¹, gave the courts express authority to award counsel's fees. The purpose of the amendment was to guarantee that attorneys rendering effective and productive services in the courts would receive reasonable compensation for their services but at the same time Congress sought to prevent the charging of excessive and oppressive fees. To this end the amendment provided that the court may determine and award a fee not to exceed 25 percent of the total of the past-due benefits.

It is the Secretary's contention that, under the provisions of the amendment, three conditions must be satisfied before the court may award a fee: (1) there must be a judgment, (2) which is favorable to the claimant, and (3) which awards him benefits. Applying this construction of the amendment to the instant case it is argued that while a remand for the purpose of taking new evidence is a judgment favorable to the claimant, the court did not award benefits and, therefore, had no authority to award a counsel fee.

The problem presented in this appeal has not been squarely considered or answered by this or any other circuit. The Secretary relies on Ealey v. Gardner, No. 16,736 (6 Cir. Dec. 7, 1966), an unreported order of the Sixth Circuit. There the court of appeals had remanded a case to the Secretary for the purpose of taking additional evidence as to surgery which claimant had recently undergone. After a hearing, the Secretary awarded benefits. Claimant's attorney sought to have the case redocketed in the court of appeals for the purpose of obtaining a fee. The Sixth Circuit held that "this Court has not entered any judgment in this cause and does not believe that the matter of attorney fees is one for its consideration." The court cited no cases, nor did it indulge in any real discussion of the statute. For these reasons that decision is unpersuasive.

The Secretary relies also on Chernock v. Gardner, 360 F.2d 257 (3 Cir. 1966). The question in that case was whether the Secretary's award of an attorney's fee in a proceeding in which the Secretary had awarded benefits was appealable to the federal courts under section 205(g), 42 U.S.C. § 405(g). The Third Circuit affirmed the District Court's holding that the Secretary's designation of a fee was not appealable. But the claim for disability benefits had not reached the federal courts and no attorney's fee had been set by the courts. Chernock is thus distinguishable from the case at bar.

Counsel for claimant cites Robinson v. Gardner, 374 F.2d 949 (4 Cir. 1967), in support of his contention that the District Court had authority to award a fee despite the fact that it did not render a judgment specifically awarding disability benefits. The issue before the court in Robinson was whether the District Court,...