Guido v. Schweiker, 85-3110

• Decision Date: 21 October 1985
• Docket Number: No. 85-3110,85-3110
• Citation: 775 F.2d 107
• Parties: , 11 Soc.Sec.Rep.Ser. 173, Unempl.Ins.Rep. CCH 16,361 Mary T. GUIDO, Appellant, v. Richard S. SCHWEIKER, Secretary of Health and Human Services, Appellee.
• Court: U.S. Court of Appeals — Third Circuit

Page 107

775 F.2d 107

54 USLW 2244, 11 Soc.Sec.Rep.Ser. 173,

Unempl.Ins.Rep. CCH 16,361

Mary T. GUIDO, Appellant, v. Richard S. SCHWEIKER, Secretary of Health and Human Services, Appellee.

No. 85-3110.

United States Court of Appeals Third Circuit.

Argued Oct. 1, 1985.

Decided Oct. 21, 1985.

Suzanne J. Hayden, argued, Robert N. Peirce, Jr., Pittsburgh, Pa., and Eileen S. Goodin, Barkan & Neff Co., L.P.A., Columbus, Ohio, for appellant.

J. Alan Johnson, U.S. Atty., Anthony M. Mariani, Asst. U.S. Atty., Pittsburgh, Pa., Beverly Dennis, III, Regional Atty., William M. Reinhart, Supervisory Asst. Regional Atty., Sharon Ferrucci, Asst. Regional Atty., Paul S. Ceja, Asst. Regional Atty., and John E. Newton, Jr., argued, Office of General Counsel, Dept. of Health and Human Services, Region III, Philadelphia, Pa., for appellee.

Before WEIS and MANSMANN, Circuit Judges, and POLLAK, District Judge ^*.

OPINION OF THE COURT

WEIS, Circuit Judge.

In this appeal, we conclude that in Social Security disability cases a district court is authorized by the Act to approve counsel's requests for fees from the claimant's award only for services performed in court. Compensation for work performed in the administrative phase must be determined separately by the Secretary.

The claimant's attorney applied to the district court for approval of fees attributable to representation not only before the court but in administrative proceedings as well. The district judge awarded compensation for professional services in court, concluding that the claimant's counsel must direct an application for fees arising from the administrative activity to the Secretary.

Claimant retained counsel after the Social Security Administration had denied her request for disability benefits. Following two hearings before an ALJ and two proceedings in the district court, she received the award she had sought. Her counsel submitted an itemization of work performed, and asked for fees of $5,042.45 to be paid from past due benefits. The district judge approved only the $2,937.50 attributable to court representation.

On appeal, the claimant's counsel contends that the district court has the authority to set compensation for services in both court and administrative proceedings. The Secretary responds that the district court's order represents the majority view on this unsettled question. This case squarely presents the issue reserved in Reid v. Heckler, 735 F.2d 757, 761 n. 3 (3d Cir.1984).

The Social Security Act authorizes a court to award reasonable attorney's fees for claims under Title II, "[w]henever a court renders a judgment favorable to a claimant ... represented before the court by an attorney ... for such representation...." 42 U.S.C. Sec. 406(b)(1).

The statute also directs that when the Secretary makes a determination favorable to the claimant, "he shall ... fix ... a reasonable fee to compensate such attorney for the services performed" in presenting the claim. 42 U.S.C. Sec. 406(a). The total amount awarded by both the court and the Secretary may not exceed 25 percent of the claimant's recovery of past due benefits. 42 U.S.C. Sec. 406; Morris v. Social Security Admin., 689 F.2d 495, 497 (4th Cir.1982); Webb v. Richardson, 472 F.2d 529, 536 (6th Cir.1972); Dawson v. Finch, 425 F.2d 1192, 1195 (5th Cir.1970).

The statute clearly permits the court and the Secretary to set fees for an attorney's representation in their respective bailiwicks. ¹ The issue of whether either has the authority to approve allowances for services in the other's forum, however, has resulted in a split among the courts of appeals.

In Webb v. Richardson, the Court of Appeals for the Sixth Circuit concluded that a court could set fees for an attorney's work in both tribunals. Although clear statutory direction on that point was lacking, the panel reasoned that the policy of using a single petition would further enforcement of the 25 percent limitation and would also eliminate the redundancy of separate requests. The position taken by the Sixth Circuit is not without merit; however, that court stands alone in adopting the single petition approach.

The Courts of Appeals for the First, Fourth, Eighth, and Ninth Circuits have decided that the courts have no statutory authority to award counsel fees for representation before the agency. See Gardner v. Menendez, 373 F.2d 488 (1st Cir.1967); Whitt v. Califano, 601 F.2d 160 (4th Cir.1979); Fenix v. Finch, 436 F.2d 831 (8th Cir.1971); MacDonald v. Weinberger, 512 F.2d 144 (9th Cir.1975).

In Chernock v. Gardner, 360 F.2d 257 (3d Cir.1966), this court held that the Secretary's determination of a reasonable fee for services during the administrative process could not be appealed to the district court. We found that Congress had committed that decision to the discretion of the Secretary, and therefore, Sec. 10 of the Administrative Procedure Act, 5 U.S.C. Sec. 1009, precluded judicial review. See generally Pepe v. Schweiker, 565 F.Supp. 97 (E.D.Pa.1983). Although the Chernock case might be construed as an implicit rejection of the claimant's contention in the case at hand, as noted previously, we have not directly decided the issue.

In this circuit, district court decisions are in conflict. Compare Donovan v. Secretary of Health and Human Services, 598 F.Supp. 120 (D.Del.1984) (court may not award fees for services before the agency) and Oroshnik v. Schweiker, 569 F.Supp. 399 (D.N.J.1983) (court lacks authority to allow fees for services before Secretary), with Kemp v. Schweiker, 587 F.Supp. 778 (W.D.Pa.1984) (court may award fees for attorneys' services before either tribunal).

Analysis of the statutory language does not conclusively resolve the issue, but it provides greater support for the majority position than for that of Webb v. Richardson. In granting authority to order compensation in the administrative phase, the statute states that the Secretary may by "rule and regulation, prescribe the maximum fees ... in connection with any claim before the Secretary." The statutory authorization of fee awards by the court refers to the situation where a claimant "was represented before the court by an attorney," and provides, "the court may ... allow ... a reasonable fee for such representation."

The statute does not explicitly grant either court or agency the authority to set fees in the other's jurisdiction, and it is unlikely that this omission is inadvertent. We have no indication that when Congress enacted the fee provisions in 1965 and 1968 it believed that the Secretary had any particular expertise in determining reasonable fees for courtroom representation. Congress itself set a ceiling of 25 percent, but did not fix a maximum hourly rate as it did later in the Equal Access to Justice Act, 28 U.S.C. Sec. 2412(d) (regulating attorneys' fees in cases against the United States).

In 1965, when Congress added the statutory provision permitting courts to award attorneys' fees, it was aware of the judicial...