McKittrick v. Gardner

• Decision Date: 30 May 1967
• Docket Number: No. 11192,11214.,11192
• Citation: 378 F.2d 872
• Parties: James F. McKITTRICK, Appellee, v. John W. GARDNER, Secretary of the Department of Health, Education and Welfare, Appellant. Maggie L. CROUCH, Appellee, v. John W. GARDNER, Secretary of the Department of Health, Education and Welfare, Appellant.
• Court: U.S. Court of Appeals — Fourth Circuit

378 F.2d 872 (1967)

James F. McKITTRICK, Appellee, v. John W. GARDNER, Secretary of the Department of Health, Education and Welfare, Appellant.

Maggie L. CROUCH, Appellee, v. John W. GARDNER, Secretary of the Department of Health, Education and Welfare, Appellant.

Nos. 11192, 11214.

United States Court of Appeals Fourth Circuit.

Argued April 5, 1967.

Decided May 30, 1967.

Morton Hollander, Atty., Department of Justice (Kathryn H. Baldwin, Jack H. Weiner and William Kanter, Attys., Dept. of Justice, on motion) for appellant.

W. H. Nicholson, Jr., Greenwood, S. C., for appellee McKittrick.

Kenneth L. Holland, Camden, S. C., for appellee Crouch.

Before HAYNSWORTH, Chief Judge, and SOBELOFF and WINTER, Circuit Judges.

HAYNSWORTH, Chief Judge:

In each of these cases, the Secretary objects to a routine allowance of attorney fees to lawyers representing claimants to social security benefits. In each instance the claimant prevailed in the District Court, and the Secretary does not question the lawyers' entitlement to reasonable fees. He complains only of the controlling significance given to contingent fee contracts in fixing the fees.

In the Crouch case, the District Court on November 18, 1966, because of a contingent fee contract, approved a fee of $656.37, which was twenty-five per cent of the accrued benefits. The District Judge wrote an opinion in which he declared that fees would be routinely allowed in accordance with contingent fee contracts if the contractual fee did not exceed twenty-five per cent of the accrued benefits, the claimant approved the payment and there was no affirmative indication of overreaching or unfairness. Our opinions in Lambert v. Celebrezze, 4 Cir., 361 F.2d 677, and Redden v. Celebrezze, 4 Cir., 361 F.2d 815, were construed as requiring an exercise of the Court's independent judgment only when the contractual fee exceeds the statutory maximum of twenty-five per cent.

In the McKittrick case, the District Court routinely approved a fee equal to twenty-five per cent of the claimant's accrued benefits. Subsequently, on November 2, 1966, a supplemental fee was allowed equal to twenty-five per cent of the accrued benefits due dependents, making the total approved fee approximately $1,752.00. The District Judge had been informed of the existence of a contingent fee contract, but the supplemental order allowing the additional fee rests only upon findings that there were accrued benefits payable to dependents and that neither claimant nor his wife objected to the allowance of an additional fee equal to twenty-five per cent of those benefits. There was no explicit determination of the reasonableness of the fee.

Subsequent to the allowance of the fees in these two cases, we filed an opinion on rehearing of the Lambert and Redden cases. Redden v. Celebrezze, 4 Cir., 370 F.2d 373. There, we held that the maximum fee base included accrued benefits due dependents, but we also emphasized our reading of the statute¹ as requiring the court in every case to fix and determine a reasonable fee for services rendered in the court. We specifically stated, "Routine approval of the statutory maximum allowable fee should be avoided in all cases,"² and this is true whether or not the fee claim has a contractual basis.

Our holding on rehearing in Redden requires a vacation of the fee orders in these cases.

As we attempted to point out in Redden, the statute requires the court to fix and allow a reasonable fee for services rendered in the judicial phase of the proceedings. It appears to contemplate no blind deference to contractual fee arrangements, and the congressional scheme, which places ultimate responsibility upon the court in every case, seems appropriate for a number of reasons.

The rate of accrual of benefits varies without any relation to the merits of the claim. It is fixed by such things as the claimant's prior earnings and the number of his dependents. The issue in the usual case is entitlement to benefits; their computation is rarely in question. Unlike personal injury actions, therefore, the amount of the recovery bears no relation to the lawyer's skill, effort or effectiveness.

If, in these cases, a contingent fee contract governs the amount of the fee, the dilatory lawyer is given a premium; the prompt, effective lawyer who moves expeditiously is penalized. The regrettable delays in the final adjudication of these claims, in large measure, may be unavoidable, but they should not be compounded by incentives for procrastination and delaying tactics on the part of a claimant's attorney. The modest fees claimed here may be contrasted with those claimed in Redden, where the fee base exceeded $16,000. We attribute no responsibility to the lawyer in Redden for the delay which permitted the accrued benefits to reach that level, but it is obvious that in a similar case the size of the fee base would depend, to a substantial extent, upon the effectiveness of the lawyer's advancement of his client's cause with an inverse effect upon his fee. While most lawyers are conscientious, statutes need not encourage those who are not completely so to be less conscientious in the expeditious prosecution of the claims of their clients.

More importantly, the worth of the lawyer's services varies profoundly with his effort and its effectiveness. There are lawyers in this circuit, handling such claims, who file complaints in such general and summary form that a secretary could prepare them from office forms. The complaint is followed by a motion for summary judgment in a form appropriate for every case. Without the assistance of any brief or any exposition of the facts, the lawyer casts upon the court the burden of sifting the record and, unaided, of resolving any legal question which may be involved. Such lawyers, expending little or no effort as advocates of their clients' causes are atypical, but they do exist, and they do not deserve the same fee allowance as their more deserving brothers who conscientiously assist their clients and the courts.

It would be foolish to deny that the quantity and the quality of the services rendered by lawyers in such cases as these varies throughout a vast spectrum from very little to very great, and, after a favorable outcome, the least of them may be the quickest to declare to the client, "I won your case." Such a claimant is unlikely to object to an allowance of a fee in accordance with his contingent fee arrangement, for, rightly or wrongly, he will usually give the lawyer all of the credit for the success in winning an award of benefits for him. The Bar, as a whole, is a responsible, highly motivated group, but those whose performances depress its averages are not entitled to compensation on the same basis with equal reward as those whose performances elevate it.

Our decision here is governed by the statute, but such considerations as these lend support to the...