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Spencer v. Commissioner of Social Security

United States District Court, M.D. Florida, Orlando Division

March 27, 2017

ELLEN ANN SPENCER, Plaintiff,
v.
COMMISSIONER OF SOCIAL SECURITY, Defendant.

          ORDER

          THOMAS B. SMITH United States Magistrate Judge

         Pending before the Court is Richard A. Culbertson's Uncontested Second Supplemental Request for Authorization to Charge a Reasonable Fee Pursuant to 42 U.S.C. §406(b) (Doc. 26).

         Background

         As the Court previously observed (Doc. 27), the motion presents with an unusual history. On February 21, 2014, the Court entered an Order, reversing and remanding this cause back to Defendant the Commissioner of Social Security for further proceedings, pursuant to sentence four of 42 U.S.C. § 405(g) (Docs. 17-18). On subsequent motion, the Court granted Plaintiff's petition for attorney's fees under the Equal Access to Justice Act, 28 U.S.C. § 2142(d) (the “EAJA”) (Doc. 23), in the amount of $3, 983.10 (Doc. 20).

         After the court-ordered remand, the Commissioner found Plaintiff Ellen Ann Spencer disabled and awarded her $43, 412.50 in past-due benefits (Doc. 21-2). Based on the result, Plaintiff's counsel, Mr. Culbertson, sought and was awarded $870 in attorney's fees pursuant to 42 U.S.C. § 406(b) (Docs. 21, 22).

         On July 15, 2015, Administrative Law Judge M. Hart issued an order approving the fee agreement between Mr. Culbertson and Plaintiff, pursuant to 42 U.S.C. § 406(a)(2)(A) (Doc. 26-3). The amount of the fee for work done at the administrative level pursuant to 42 U.S.C. § 406(a) was $6, 000.00, and this amount was paid to Mr. Culbertson in September 2015 (Doc. 26-2).

         On April 2, 2016, the Commissioner notified Plaintiff that her past-due benefits were $56, 913.90 (Doc. 23-2). Mr. Culbertson filed a timely Supplemental Request for Authorization to Charge a Reasonable Fee in the amount of $3, 102.25, based on the new notice changing the amount of past-due benefits (Doc. 23). Then, on May 8, 2016, the Commissioner notified Plaintiff by letter that she is entitled to past-due benefits in the amount of $55, 821 (Doc. 26-2). The Commissioner explained that the previous notice showed a higher amount because it included Plaintiff's benefit for August 2015, which was not subject to attorney fee withholding (Doc. 24-1). The Court accepted the updated accounting, and granted the Supplemental Request, in part, approving Section 406(b) fees in the amount of $3, 102.15 (Doc. 25).[1] This did not conclude the matter.

         On February 15, 2017, the Commissioner notified Mr. Culbertson that a regional administrative judge had made a unilateral determination on April 16, 2016, disapproving the fee agreement which had already been approved by Administrative Law Judge Hart on July 15, 2015 (Doc. 26-4). No reason is offered in the notification, which provides, in part: “If you are charging a fee, you need to file a fee petition within 30 days from the date of this notice.” (Id.). Mr. Culbertson objects to the action of the regional administrative judge disapproving his previously approved fee agreement, but files the instant motion as “he is still required to file a Second Supplemental Request for Authorization to Charge a Reasonable Fee unless this Court issues an Order determining the Commissioner did not have the authority to “unauthorize” the administrative fee.” (Doc. 26 at 6).

         Faced with this unusual set of circumstances, the Court directed the Commissioner to file a response to the motion, addressing “the relevant history of this proceeding, the extent of the Court's authority to remedy the situation, and the appropriate remedy” (Doc. 27). The Commissioner filed her response (Doc. 28) and a supporting declaration (Doc. 29). Although Mr. Culbertson's motion purports to be “uncontested, ” the Commissioner now takes the position that the Court is without authority to grant him the relief he is seeking and argues that the motion must be denied as premature or duplicative (Doc. 28).

         Due to the Commissioner's apparent change of heart, the Court gave Mr. Culbertson leave to file a reply (Doc. 30). He has now done so (Doc. 31), and his motion is ripe for resolution.[2]

         Discussion

         Standards of Law

         There are three statutory provisions under which attorneys representing claimants in Social Security disability cases may be compensated: 42 U.S.C. §§ 406(a) and 406(b), and 28 U.S.C. § 2142(d). Section 406(a) provides the exclusive avenue for attorneys seeking fees for work done before the Commissioner at the administrative level. The fees awarded under §406(a) are paid out of the claimant's past-due benefits awarded. 42 U.S.C. § 406(a)(2)(A) and (B). Section 406(a) caps the fees that may be awarded at twenty-five percent of past-due benefits awarded or a lesser fixed amount. 42 U.S.C. § 406(a)(2)(A)(ii)(I)-(II).

         For fees incurred representing claimants in federal court, claimants and their attorneys may seek fees under two statutory provisions, 42 U.S.C. § 406(b) and the EAJA. Under Section 406(b), upon entry of judgment in favor of a claimant, the Court may award a reasonable fee for work performed before the Court, which is paid out of the claimant's past-due benefits awarded. 42 U.S.C. § 406(b)(1)(A). Section 406(b) imposes a cap on the total amount of fees that may be awarded. 42 U.S.C. § 406(b)(1)(A). Section 406(b) provides that the Court may not award fees “in excess of 25 percent of the total of the past-due benefits to which the claimant is entitled.” 42 U.S.C. § 406(b)(1)(A). In capping the fee at twenty-five percent, “Congress ... sought to protect claimants against ‘inordinately large fees' and also to ensure that attorneys representing successful claimants would not risk ‘nonpayment of ...


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