Murkeldove v. Astrue

• Decision Date: 15 March 2011
• Docket Number: Nos. 09–10902,09–11093.,s. 09–10902
• Parties: McClenon MURKELDOVE, Jr., Plaintiff–Appellant,v.Michael J. ASTRUE, Commissioner of Social Security, Defendant–Appellee.Gralin Vinning, Plaintiff–Appellant,v.Michael J. Astrue, Commissioner of Social Security, Defendant–Appellee.Joann Brown, Plaintiff–Appellant,v.Michael J. Astrue, Commissioner of Social Security, Defendant–Appellee.Mary Ann Kennan–Croom, Plaintiff–Appellant,v.Michael J. Astrue, Commissioner of Social Security, Defendant–Appellee.Eleanor S. Howard, Plaintiff–Appellant,v.Michael J. Astrue, Commissioner of Social Security, Defendant–Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

635 F.3d 784

165 Soc.Sec.Rep.Serv. 6

McClenon MURKELDOVE, Jr., Plaintiff–Appellant,

v.Michael J. ASTRUE, Commissioner of Social Security, Defendant–Appellee.Gralin Vinning, Plaintiff–Appellant,

v.Michael J. Astrue, Commissioner of Social Security, Defendant–Appellee.Joann Brown, Plaintiff–Appellant,

v.Michael J. Astrue, Commissioner of Social Security, Defendant–Appellee.Mary Ann Kennan–Croom, Plaintiff–Appellant,

v.Michael J. Astrue, Commissioner of Social Security, Defendant–Appellee.Eleanor S. Howard, Plaintiff–Appellant,

v.Michael J. Astrue, Commissioner of Social Security, Defendant–Appellee.

Nos. 09–10902

09–11093.

United States Court of Appeals, Fifth Circuit.

March 15, 2011.

Eric Schnaufer (argued), Evanston, IL, for all Plaintiffs–Appellants.Carl M. Weisbrod, Miller Weisbrod, L.L.P., Dallas, TX, for Murkeldove.Michael P. Dunlap, Dallas, TX, for Plaintiffs–Appellants in No. 09–11093.Michael Eugene Robinson, Trial Atty. (argued), William Kanter, U.S. Dept. of Justice, Civ. Div., App. Staff, Washington, DC, Clayton R. Mehaffey, Howard Alan Borg, Asst. U.S. Atty., Fort Worth, TX, for Astrue.Appeal from the United States District Court for the Northern District of Texas.Before STEWART, PRADO and ELROD, Circuit Judges.CARL E. STEWART, Circuit Judge:

Plaintiff–Appellant, McClenon Murkeldove, Jr., sought past-due benefits from the Social Security Commissioner, and his claim was denied. He subsequently appealed the decision to the district court. After the district court reversed the Social Security Commissioner's decision and remanded the case for further proceedings, Murkeldove applied for attorney's fees pursuant to 28 U.S.C. § 2412(d)(1)(A), a subsection of the Equal Access to Justice Act (EAJA). The district court denied his request. Murkeldove appealed the district court's judgment.

In unrelated cases, Plaintiffs–Appellants Gralin D. Vinning, JoAnn Brown, Mary Ann Keenan–Croom, and Eleanor S. Howard independently filed for past-due benefits from the Social Security Commissioner. Each of their claims were denied. They individually appealed the decisions, and their cases were heard by the same district court judge that decided Murkeldove's case. After the district court reversed the Social Security Commissioner's decisions and remanded the cases for further proceedings, each party applied for an EAJA award of attorney's fees. Because the four cases raised common issues, the district court consolidated the cases for its review. The district court subsequently denied their requests. The parties appealed the district court's judgment.

The four cases consolidated by the district court were in turn consolidated by this court with Murkeldove v. Astrue, No. 4:08–CV–172, for briefing and oral argument purposes. At issue on appeal is whether the parties have “incurred” attorney's fees for purposes of the EAJA. Furthermore, in regard to Murkeldove only, even if he incurred EAJA attorney's fees, whether “special circumstances” would make an EAJA award unjust. The Commissioner and Plaintiffs agree that Plaintiffs are entitled to EAJA awards because they have incurred fees. They also agree that EAJA awards in such circumstances are essential for achieving the goals of the EAJA.

For the following reasons, we VACATE the district court's judgments and REMAND the cases for further proceedings consistent with this opinion.

I. BACKGROUND

A. Relevant Facts

This case involves five consolidated actions. In the first case, the district court reversed the decision of the Social Security Commissioner (hereinafter, Commissioner), denying McClenon Murkeldove's claims for disability insurance benefits, under Title II of the Social Security Act, 42 U.S.C. §§ 416(I), 423(d), and supplemental security income benefits, under Title XVI of the Social Security Act, 42 U.S.C. §§ 1382, 1382c. The case was then remanded to the Commissioner for further proceedings pursuant to sentence four of 42 U.S.C. § 405(g), which permits judicial review of a final decision by the Commissioner and grants a court the ability to affirm, modify, or reverse the decision with or without remanding the benefits case for rehearing.

Subsequently, Murkeldove filed an application for attorney's fees and costs pursuant to the EAJA, which the Commissioner did not oppose. The district court denied the motion and explained that, “[t]he contingent fee contract between Murkeldove and his lawyers contemplates payment of a fee by Murkeldove only in the event his lawyers are successful in obtaining for him an award of Social Security benefits.” The district court concluded that the contingency that would obligate Murkeldove to pay attorney's fees—an award of past-due benefits—had yet to occur. Thus, Murkeldove had yet to “incur” attorney's fees for purposes of the EAJA, which would entitle him to an award of fees. The district court further held that, even if it determined that Murkeldove was entitled to an EAJA award, “special circumstances” would make an award of attorney's fees unjust. Murkeldove appealed the district court's judgment to this court.

In four unrelated cases, the same district court that decided Murkeldove's case reversed the Commissioner's decisions in Vinning v. Astrue, No. 4:08–CV–059–A; Brown v. Astrue, No. 4:08–CV–155–A; Kennan–Croom v. Astrue, No. 4:08–CV–324–A; and Howard v. Astrue, No. 4:08–CV–522–A (collectively, Vinning v. Astrue). The district court remanded each case back to the Commissioner for further proceedings pursuant to sentence four of 42 U.S.C. § 405(g). Shortly after, the parties in each of those cases (collectively, the Vinning Plaintiffs or Plaintiffs) filed individual motions for attorney's fees pursuant to the EAJA. As with Murkeldove, the Commissioner did not oppose the Plaintiffs' requests for fees. Because the Plaintiffs' motions raised common issues, the district court consolidated the requests for fees pursuant to Federal Rule of Civil Procedure 42. After reviewing the Plaintiffs' contingency-fee agreements, which were identical because the parties shared the same counsel, the district court concluded that the agreements did not obligate them to pay attorney's fees unless they won their benefits cases on remand. Because they had yet to receive a final determination on their benefits cases, the district court held that they had not “incurred” attorney's fees for purposes of the EAJA and denied their motions for fees. The Plaintiffs appealed the district court's judgment.

After Murkeldove and the Vinning Plaintiffs filed their notices of appeal, they jointly filed an unopposed motion to consolidate their cases in this court for purposes of briefing and oral argument pursuant to Federal Rule of Appellate Procedure 3. This court granted the motion. On appeal, the Commissioner agrees with Murkeldove and the Vinning Plaintiffs that the district court erred and supports their requests for fees.

B. Statutory Scheme

Provisions in two statutes—the Social Security Act, 42 U.S.C. § 406, and the Equal Access to Justice Act, 28 U.S.C. § 2412—govern the award of attorney's fees in Social Security actions. Case law on this issue continues to clarify what is otherwise a complex statutory scheme. Because this case centers on our application of these statutory provisions, we preface our analysis with a brief discussion of each.

1. The Social Security Act

Sections 406(a) and 406(b) of the Social Security Act provide for the discretionary award of attorney's fees out of the past-due benefits recovered by a successful claimant in a Social Security action. Section 406(a) allows an attorney to receive fees “[f]or representation of a benefits claimant at the administrative level.” Gisbrecht v. Barnhart, 535 U.S. 789, 794, 122 S.Ct. 1817, 152 L.Ed.2d 996 (2002) (citing 42 U.S.C. § 406(a) and explaining that after a petition for fees has been filed, the Commissioner may allow reasonable fees “for services performed in connection with any claim before” it). These fees may be awarded even if the benefits claimant is unsuccessful. 20 CFR § 404.1725(b)(2) (“We may authorize a fee even if no benefits are payable.”). “As an alternative to fee petitions, the Social Security Act ... accommodates contingent-fee agreements filed with the agency in advance of a ruling on a claim for benefits.” Gisbrecht, 535 U.S. at 795, 122 S.Ct. 1817. If the Commissioner awards the claimant benefits, the Commissioner will approve the agreement, “if the fee specified in the agreement does not exceed the lesser of”: (1) “25 percent of the total amount of ... past-due benefits” or (2) $4,000. §§ 406(a)(2)(A)(ii), (iii). Pursuant to section 406(a), it is a crime for an attorney “to charge or collect any fee in excess of the maximum fee, prescribed by the” Commissioner. Id. § 406(a)(5).

Similarly, section 406(b) governs the award and collection of fees by attorneys for the representation of claimants in court. Section 406(b) provides:

Whenever a court renders a judgment favorable to a claimant under this subchapter who was represented before the court by an attorney, the court may determine and allow as part of its judgment a reasonable fee for such representation

42 U.S.C. § 406(b)(1)(A). Attorneys often obtain these fees from their clients pursuant to a contingency-fee agreement. Gisbrecht, 535 U.S. at 800, 122 S.Ct. 1817 (explaining that “contingent-fee contracts ... are the most common fee arrangement between attorneys and Social Security claimants.”). An award pursuant to section 406(b) not only must be reasonable, but also, like a section 406(a) award, is limited to 25% of the claimant's award of past-due benefits. Id. Section 406(b) further states: “Any attorney who charges, demands, receives, or collects for services rendered in connection with proceedings before a court ... any amount in excess of that allowed by the court ... shall be guilty of a misdemeanor.” Id. § 406(b)(1)(A)(2).

If a party receives an award pursuant to section 406(a) for administrative...