Walker v. Astrue

• Decision Date: 02 February 2010
• Docket Number: No. 08-1446.,No. 08-1447.,08-1446.,08-1447.
• Citation: 593 F.3d 274
• Parties: Lawrence WALKER, Appellant v. Michael J. ASTRUE, Commissioner of Social Security, (Pursuant to Rule 43(c), F.R.A.P.). Jeffrey R. Garris, Appellant v. Michael J. Astrue, Commissioner of Social Security (Pursuant to Rule 43(c), F.R.A.P.).
• Court: U.S. Court of Appeals — Third Circuit

593 F.3d 274

Lawrence WALKER, Appellant v. Michael J. ASTRUE, Commissioner of Social Security, (Pursuant to Rule 43(c), F.R.A.P.).

Jeffrey R. Garris, Appellant v. Michael J. Astrue, Commissioner of Social Security (Pursuant to Rule 43(c), F.R.A.P.).

No. 08-1446.

No. 08-1447.

United States Court of Appeals, Third Circuit.

Argued October 28, 2009.

Filed February 2, 2010.

Zenford A. Mitchell (Argued), Pittsburgh, PA, for Appellants.

Shawn C. Carver, Robert W. Kosman (Argued), Social Security Administration, Philadelphia, PA, for Appellee.

Before SMITH, FISHER and STAPLETON, Circuit Judges.

OPINION OF THE COURT

FISHER, Circuit Judge.

This case presents a question of first impression in the Third Circuit and one that has divided our sister courts of appeals: what filing deadline under the Federal Rules of Civil Procedure governs a petition for attorney fees under Section 406(b) of the Social Security Act when a case is remanded under sentence four of Section 405(g) for a determination of benefits? The Fifth and Eleventh Circuits have held that Rule 54(d)(2)'s fourteen-day filing deadline applies, see Bergen v. Taylor, 454 F.3d 1273, 1277 (11th Cir.2006); Pierce v. Barnhart, 440 F.3d 657, 663 (5th Cir.2006), while the Tenth Circuit uses the more amorphous "reasonable time" standard under Rule 60(b), see McGraw v. Barnhart, 450 F.3d 493, 505 (10th Cir. 2006). The District Court sua sponte dismissed Counsel's petitions, holding that, under either rule, Counsel's request was untimely. We now join the Fifth and Eleventh Circuits in holding that Rule 54(d)(2) is the appropriate standard, subject to tolling until counsel's notification of an award of benefits on remand. Accordingly, we will reverse the District Court's dismissal and remand to give Counsel an opportunity to present evidence of his notification of the award.

I.

The relevant facts of these two appeals are virtually identical. Attorney Zenford A. Mitchell ("Counsel") filed Social Security appeals on behalf of two clients, Lawrence Walker ("Walker") and Jeffrey Garris ("Garris") under Title II of the Social Security Act, 42 U.S.C. §§ 401-433. Both Walker and Garris were denied benefits by an Administrative Law Judge and were denied review by the Appeals Counsel. Both sought review in the United States District Court for the Western District of Pennsylvania. Walker's case was remanded by the District Court pursuant to sentence four of 42 U.S.C. § 405(g) on May 1, 2002, while Garris's case was remanded pursuant to the same statute on October 20, 2003.¹ In connection with each remand, Counsel sought and received a partial award of attorney fees under the Equal Access to Justice Act, 28 U.S.C. § 2412(d).

On administrative remand, both Walker and Garris were successful in demonstrating that they were disabled within the meaning of the Social Security Act and therefore entitled to disability benefits. The Commissioner issued her Notice of Award finding Walker disabled on February 25, 2004, and finding Garris disabled on August 27, 2004. The Notices of Award contained both the valuation of past-due benefits to the plaintiff as well as notification of the twenty-five percent of past-due benefits to be withheld pending approval of any attorney fees.

It is here the parties' agreement on the facts ends. The Social Security Administration claims it sent Counsel a copy of the Notice of Award in Walker's case on June 27, 2004. Counsel alleges he was not informed of Walker's award until he received a phone call from a Social Security Administration representative on June 26, 2007. In the Garris case, the Social Security Administration claims Counsel was sent a copy of the Notice of Award on February 2, 2005. Again, Counsel contends he was notified of the award for the first time by phone on December 1, 2006.

Counsel filed a motion for attorney fees under § 406(b) of the Social Security Act in the District Court on February 7, 2007, in the Garris case and on October 17, 2007, in the Walker case.² The District Court sua sponte dismissed both motions as untimely on January 29, 2008. This timely appeal followed.

II.

The District Court had subject matter jurisdiction over the underlying Social Security actions pursuant to 42 U.S.C. § 405(g) and jurisdiction over the attorney fees motions pursuant to 42 U.S.C. § 406(b). We have jurisdiction to review the District Court's order under 28 U.S.C. § 1291.

We apply an abuse of discretion standard when reviewing the District Court's denial of a petition for fees. See In re Rite Aid Corp. Sec. Litig., 396 F.3d 294, 299 (3d Cir.2005). However, where the District Court bases its denial on an application of law, our review is plenary. Cf. McKenna v. City of Philadelphia, 582 F.3d 447, 460 (3d Cir.2009).

III.

The provision of the Social Security Act providing for attorney fees reads in relevant part:

Whenever a court renders a judgment favorable to a claimant . . . 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 percent of the total of the past-due benefits to which the claimant is entitled by reason of such judgment. . . .

42 U.S.C. § 406(b)(1)(A) ("Section 406(b)"). Section 406(b) does not contain any explicit time limit for requesting fees.³

The Fifth and Eleventh Circuits have held that counsel seeking fees under § 406(b) must do so pursuant to Federal Rule of Civil Procedure 54(d)(2). See Bergen v. Taylor, 454 F.3d at 1277 ("We agree with the Fifth Circuit that Fed.R.Civ.P. 54(d)(2) applies to a § 406(b) attorney's fee claim."); Pierce v. Barnhart, 440 F.3d at 663 (applying Rule 54(d)(2) to a § 406(b) claim). Rule 54(d) provides that a motion for attorney fees must "be filed no later than 14 days after the entry of judgment," unless otherwise provided by court order or statute. Fed.R.Civ.P. 54(d)(2)(B)(i).

In Pierce, the initial two § 406(b) fee petitions were filed twenty and thirty days after the remand, but before the claimants had been awarded benefits by the ALJ pursuant to the review required by the remand order. 440 F.3d at 664. The petitions were dismissed as premature because the value of the award was not yet known. Id. When the § 406(b) petitions were re-filed after the award of benefits, they were dismissed as untimely because they were filed over sixteen months after the entry of the remand orders. Id. On appeal, the Fifth Circuit held that the district court had abused its discretion in dismissing the petitions. Id. It reasoned that Rule 54(d)(2) permitted revision of the fourteen-day filing deadline by order of the court. See Fed.R.Civ.P. 54(d)(2)(B) (providing for a fourteen-day period for filing for attorney fees "[u]nless otherwise provided by statute or order of the court"). Because the fee petition could not be filed until the ALJ issued the award, the court held that the district court should have extended the time to file the petition pursuant to its Rule 54 authority. 440 F.3d at 664.

In Bergen, the district court also dismissed a § 406(b) fee petition as untimely under Rule 54(d)(2). On appeal, the Eleventh Circuit reversed. 454 F.3d at 1277-78. The court held that Rule 54(d)(2) was the correct standard, but because the Commissioner had not objected to the timeliness of the petition, it declined to decide when the fourteen-day period for filing the petition began. Id. This opinion vacated and superseded an earlier opinion in the proceedings which held that the fourteen-day period ran from the day the award notice was issued. See Bergen v. Comm'r of Social Sec., 444 F.3d 1281, 1286 vacated and superseded, 454 F.3d 1273 (11th Cir.2006).

The Tenth Circuit endorsed a different approach in McGraw v. Barnhart, 450 F.3d at 505. The district court in McGraw assessed the timeliness of a fee petition under Rule 54(d)(2). On appeal, the Tenth Circuit held that a petition for fees under § 406(b) should be filed under Rule 60(b)(6), which permits the court on motion to "relieve a party or its legal representative from a final judgment, order, or proceeding" for enumerated reasons, including "any other reason that justifies relief." Fed.R.Civ.P. 60(b)(6). The court reasoned that, although Rule 60(b)(6) is "extraordinary and reserved for exceptional circumstances . . . the rule should be liberally construed when substantial justice will thus be served." 450 F.3d at 505. Under Rule 60(b)(6), a petition for fees under § 406(b) "should be filed within a reasonable time of the Commissioner's decision awarding benefits" and is "committed to the district court's sound discretion." Id.

The confusion in the courts of appeals undoubtedly stems from the imperfect fit of either approach. The problem the courts faced in Pierce and Bergen is that a strict application of Rule 54(d)(2)'s fourteen-day filing deadline is impossible where a court remands under § 406(b) for administrative determination of benefits. By its terms, § 406(b) conditions the right to fees on the award of benefits and caps those fees at twenty-five percent of the awarded benefits. Thus a court cannot determine whether a right to a fee award exists and what the value of that fee award should be until the administrative remand proceeding is complete and the amount of benefits is fixed. However, a remand under 42 U.S.C. § 405(g) would rarely, if ever, be completed within fourteen days of the remand order.⁴ Therefore, a timely Rule 54(d)(2) motion for fees, filed within fourteen days of the remand order, is necessarily premature; and a similar motion filed after the administrative determination of benefits is most likely untimely.

Although the Tenth Circuit's approach rectifies the conflict between the Rule 54(d)(2) filing deadlines and the realities of administrative remand, McGraw finds little support in the law. The only authority McGraw cites for the application of a "reasonable time" standard to § 406(b) fee requests is...