Taylor v. Heckler

• Decision Date: 16 May 1985
• Docket Number: Civ. A. No. 83-80.
• Citation: 608 F. Supp. 1255
• Parties: Edward TAYLOR, Plaintiff, v. Margaret M. HECKLER, Secretary of Health and Human Services, Defendant.
• Court: U.S. District Court — District of New Jersey

608 F. Supp. 1255

Edward TAYLOR, Plaintiff, v. Margaret M. HECKLER, Secretary of Health and Human Services, Defendant.

Civ. A. No. 83-80.

United States District Court, D. New Jersey.

May 16, 1985.

Freeman & Bass by Constance J. Kosuda, Newark, N.J., for plaintiff.

W. Hunt Dumont, U.S. Atty. by Judy Sello and Paul J. Dillon, Newark, N.J., for defendant.

OPINION

SAROKIN, District Judge.

This court has previously suggested that the Equal Access to Justice Act be utilized as a means of deterring the indifference displayed by the Department of Health and Human Services to court precedent as well as to the suffering and humiliation of those to whom benefits have been wrongfully denied. Merli v. Heckler, 600 F.Supp. 249 (D.N.J.1984). If this avenue of recovery is available to counsel, it is incumbent upon counsel to pursue it or justify the failure to do so. Otherwise, the net award to claimants may be needlessly reduced. Applications for counsel fees are subject to analysis based upon the quality of the services performed and the result achieved. Failure to seek fees from the government, rather than the client, clearly affects both the quality of counsel's performance and the result achieved, particularly if there is a substantial likelihood that the government could be held responsible for the payment of those fees.

Accordingly, in every such application counsel should be required: 1) to advise the client of his or her right to contest the amount of the fee, and 2) to explain that in counsel's opinion no other means for recovery of said fee is available, and the grounds for such opinion.

By imposing these requirements upon counsel, the court will be assured that successful claimants will be advised of the claim for fees from them and their right to contest such fees. Further, the court and the client will be assured that other avenues to collect such fees have been exhausted or cannot be for certain valid and stated reasons.

Because of the importance of not eroding the recovery by Social Security claimants in these matters, counsel fees should not be permitted to reduce the amount actually received except as a last resort. It is unfortunate enough that the multitude of these claims are wrongfully denied, causing untold anguish and deprivation in the interim, but to unnecessarily reduce the award further where counsel fees could be obtained elsewhere would serve only to compound the wrongs suffered in these matters.

This matter is before the court on the application of plaintiff's counsel for an award of attorney's fees equal to twenty-five per cent of the back benefits paid to plaintiff pursuant to the Opinion and Order of the court dated July 23, 1984. The fee requested amounts to $8,214.50. Counsel documents seventy (70) hours of work on this case, thus requesting a fee of $117.00 per hour. The government has objected to this fee, arguing that only those hours representing work performed before the court are properly encompassed by this application. It recommends authorization of a $4,000.00 fee for such services, and the filing of a separate application for the remainder before the Social Security Administration.

Counsel served his notice of motion for fees upon plaintiff by certified mail, return receipt requested, on January 4, 1985. See Aff. of Paulette L. Jones (1/4/85) ¶¶ 1-2. The court has received no opposition to counsel's request from plaintiff.

Title 42 U.S.C. § 406(b)(1) states, in pertinent part:

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, not in excess of 25 per cent of the total of past-due benefits to which the claimant is entitled by reason of such judgment ...

This section embodies "the sound policy of providing claimants with adequate representation ...," Reid v. Heckler, 735 F.2d 757, 760 (3d Cir.1984), and thus enhances the substantive rights of Social Security claimants. This does not, however, mean that attorneys' requests for fees should be rubber-stamped. Indeed, the district court has an affirmative obligation to determine the reasonableness of the fee requested by an attorney.

While the lawyer is entitled to a reasonable compensation for the services rendered to him in the judicial proceeding, these benefits are provided for the support and maintenance of the claimant and his dependents and not for the enrichment of members of the bar. Routine approval of the statutory maximum should be avoided in all cases. In a great majority of cases, perhaps, a reasonable fee will be much less than the statutory maximum.

Lewis v. Secretary of Health and Human Services, 707 F.2d 246, 248 (6th Cir.1983) (emphasis in original), quoting Redden v. Celebrezze, 370 F.2d 373, 376 (4th Cir. 1966). See also MacDonald v. Weinberger, 512 F.2d 144, 146-47 (9th Cir.1975); Fenix v. Finch, 436 F.2d 831, 836 (8th Cir.1971); McKittrick v. Gardner, 378 F.2d 872 (4th Cir.1967); Eustache v. Secretary of the Department of Health and Human Services, 601 F.Supp. 176, 178 (E.D.N.Y. 1985); Burris v. Heckler, 598 F.Supp. 573, 574-75 (N.D.Texas 1984); Stiltner v. Califano, 470 F.Supp. 261, 262 (E.D.Tenn.1977). Thus, the court is to consider, for example, the time and labor required; the novelty and difficulty of the questions posed; the skill required; the customary fee charged; whether the fee is contingent or fixed; the time limitations imposed upon the attorney; the amount involved and result attained; the experience, reputation and ability of the attorney; the nature and length of the professional relationship with the client; and awards in similar cases. Blankenship v. Schweiker, 676 F.2d 116, 117-18 (4th Cir.1982), citing Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir. 1974); McKittrick v. Gardner, supra. See also Burris v. Heckler, supra, 598 F.Supp. at 574-75. See generally 20 C.F.R. § 404.1725(b) (listing factors considered by the Secretary in reaching a determination as to fee).

The court scrutinizes applications such as these with particular care because the interests of the attorney and his or her client "are inherently in conflict" in Social Security cases. Lewis, supra, 707 F.2d at 251, quoting Moore v. Califano, 471 F.Supp. 146 (S.D.W.Va.1979). Of course, such conflict peaks at the point at which the attorney requests a fee to be deducted, dollar-for-dollar, from the award of back benefits to which the claimant is entitled. Moreover, having entered into a contingent fee arrangement for services culminating in a result in his or her favor, a claimant is unlikely to challenge the attorney's fee requested, as long as it is in accord with such agreement. As stated by one court,

... in most Social Security cases ... entitlement to benefits constitutes the sole issue in the case; the proper method of computation of benefits is usually not disputed. In such cases there is generally a much less direct correlation between the size of the claimant's recovery and the lawyer's skill, effort or effectiveness than there is in, say, most personal injury cases. See McKittrick v. Gardner, supra, 378 F.2d at 874. Moreover, we are not overly impressed by counsel's observation that plaintiff has not objected to the size of the award. As the court noted in McKittrick, supra, at 874, the least competent and diligent attorney "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."

Lewis, supra, 707 F.2d at 248. See also Eustache, supra, 601 F.Supp. at 178, citing Modica v. Secretary of Health and Human Services, 581 F.Supp. 39 (E.D.N.Y. 1984) (court would not treat the contingency agreement as a factor in setting fees under section 406(b)(1) ). However, the conflict between attorney and client in Social Security cases exists well before the point at which the attorney's fee is set. Because such fee is based upon a percentage of the back benefits received,

... 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.... 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.

McKittrick, supra, 378 F.2d at 874. See also Redden, supra, 370 F.2d at 376. Hence, even during the course of litigation, the interests of counsel and client diverge: while the latter understandably desires the quickest possible resolution of the matter in his or her favor, section 406(b) may encourage some counsel to prolong the matter in order to increase the size of the award from which the fee is drawn.

There are two solutions to this conundrum. The first and most obvious is embodied in the Equal Access to Justice Act, 28 U.S.C. § 2412 ("EAJA"), which provides for attorney's fees to be paid not out of the pocket of the claimant, but by the government, in cases in which its position was not "substantially justified." 28 U.S.C. § 2412(d)(1)(A). "It is settled law in the Third Circuit that the Equal Access to Justice Act applies to judicial review actions brought pursuant to the Social Security Act, 42 U.S.C. § 405(g)(1982)." Tressler v. Heckler, 748 F.2d 146, 148 (3d Cir.1984) (citing authorities). See also Wolverton v. Heckler, 726 F.2d 580, 582 (9th Cir.1984) (the existence of section 406(b) does not preclude an award of fees under the EAJA). Indeed, the purpose of the EAJA was ...