MARIAN GIORGIO v. COMMISSIONER OF SOCIAL SECURITY (2025)

REPORT AND RECOMMENDATION

Plaintiff Marian Giorgio commenced this action against Defendant Commissioner of Social Security, alleging that Defendant erroneously denied her application for Social Security Disability benefits under the Social Security Act, 42 U.S.C. §§ 301 et seq. (See generally Compl., ECF No. 1.)¹ The Court granted the parties’ stipulation to remand to the Social Security Administration (“the SSA”) for further proceedings, and Plaintiff eventually was awarded disability benefits. Before the Court is Plaintiff's counsel Law Office of Charles E. Binder and Harry J. Binder, LLP's (“Binder”) motion for attorney fees, pursuant to 42 U.S.C. § 406(b). (Binder's Mot., ECF No. 17.) Defendant takes no position on the amount of the award, but requests that attorneys’ fees be “awarded,” rather than Defendant being directed to “pay” Binder. (Def.’s Resp., ECF No. 18.) The Honorable Eric Komitee referred the motion for report and recommendation. For the reasons set forth below, the Court respectfully recommends that the motion should be granted in part and denied in part.

I. BACKGROUND

A. Procedural History

As alleged in the Complaint, Plaintiff was disabled and has been unable to work from January 3, 2016 through the present. (See Compl., ECF No. 1 ¶¶ 4–5.) On March 23, 2017, Plaintiff filed an application for Social Security Disability benefits, which an administrative law judge (“ALJ”) denied on March 24, 2020. (R. at 8–10.) Plaintiff timely requested a review of the ALJ's decision with the Appeals Council of the SSA. (R. at 260–62.) On December 18, 2020, the Appeals Council denied Plaintiff's request. (Id. at 1–4; Binder Affirmation, ECF No. 17-4 ¶ 1.)

On January 28, 2021, Plaintiff retained Binder to represent her in federal court to appeal the denial of benefits and during any subsequent proceedings if the court remanded the case. (Binder's Mot. Ex. A, ECF No. 17-5 at 1–3 (“Retainer Agt.”).) The retainer agreement provided that if the appeal was successful and Plaintiff was awarded past-due benefits by the federal court or by the SSA after remand, Binder's firm would receive up to 25% of the past-due benefits, pursuant to 42 U.S.C. § 406, as approved by the Court under Section 406(b) or the Commissioner under Section 406(a). (Id. ¶¶ 1, 3.) The retainer agreement also stated that Plaintiff assigned her interest in any fees pursuant to the Equal Access to Justice Act, 28 U.S.C. § 2412 (“EAJA”), to Binder's firm for representing her in federal court. (Id. ¶ 4.) However, Plaintiff and Binder agreed that the combined fees for any representation in federal court or before the SSA after remand would not exceed 25% of any retroactive benefits awarded to Plaintiff. (Id. ¶ 3.)

Plaintiff initiated this lawsuit on February 11, 2021, alleging that the ALJ's March 24, 2020 decision, affirmed by the Appeals Council, was erroneous, unsupported by substantial evidence, and contrary to the Social Security Act. (Compl., ECF No. 1 ¶¶ 13–14.) On July 27, 2021, the parties jointly moved to remand the Commissioner's final decision for further consideration. (ECF No. 12.) The Court granted the motion on July 29, 2021, and entered judgment reversing and remanding on August 9, 2021, pursuant to 42 U.S.C. § 405(g).² (ECF Nos. 13–14.) On remand, on November 28, 2023, ALJ Robert R. Schriver found Plaintiff disabled since January 3, 2016. (Binder Affirmation, ECF No. 17-4 ¶ 5; id. Ex. C, ECF No. 17-5 at 8.)

B. Attorneys’ Fees

On September 21, 2021, the Court granted the parties’ stipulated request that Plaintiff should be awarded $655.89 in attorney fees and expenses and $400.00 in costs pursuant to the EAJA. (Sept. 21, 2021 Order, ECF No. 16.) The Court further ordered that those attorneys’ fees should be paid directly to Binder “if plaintiff has agreed to assign h[er] rights to EAJA fees to h[er] attorney, and provided that plaintiff owes no debt that is subject to offset under the Treasury Offset Program.”³ (Id.)

In a Notice of Award dated March 11, 2024 (the “NOA”), the SSA notified Plaintiff that she was entitled to $144,797.70 in past-due benefits from July 2016 through January 2024. (Binder Affirmation Ex. C, ECF No. 17-5 at 9.) The NOA also notified Plaintiff that the SSA had withheld $36,199.43 in past-due benefits to pay her representative. (Id.)

On March 18, 2024, Binder filed the instant motion requesting attorneys’ fees pursuant to 42 U.S.C. § 406(b). (Binder's Mot., ECF No. 17.) Defendant responded on March 27, 2024. (Def.’s Resp., ECF No. 18.) Judge Komitee referred the motion for report and recommendation. (Apr. 9, 2024 Order Referring Mot.)

II. DISCUSSION

A. Legal Standards

“[Section 406(b) of the SSA] authorizes a court that enters a judgment favorable to a social security claimant to award, ‘as part of its judgment,’ a reasonable fee for counsel's representation before the court, not to exceed 25% of the total past-due benefits to which the claimant is entitled ‘by reason of such judgment.’ ” Sinkler v. Berryhill, 932 F.3d 83, 86 (2d Cir. 2019) (quoting 42 U.S.C. § 406(b)(1)(A) and citing Gisbrecht v. Barnhart, 535 U.S. 789, 807–08 (2002)). “[W]here there is a contingency fee agreement in a successful social security case, the district court's determination of a reasonable fee under § 406(b) must begin with the agreement, and the district court may reduce the amount called for by the contingency agreement only when it finds the amount to be unreasonable.” Wells v. Sullivan, 907 F.2d 367, 371 (2d Cir. 1990) (“Wells II”).

Procedurally, “[m]otions for attorneys’ fees under [Section 406(b)] must be filed within the 14-day filing period prescribed by Rule 54(d) of the Federal Rules of Civil Procedure.” Miller v. Comm'r of Soc. Sec., No. 20-CV-5214 (PKC), 2023 WL 5002789, at *2 (E.D.N.Y. Aug. 4, 2023) (citing Sinkler, 932 F.3d at 91). “Where ․ a Social Security claimant secures a judgment reversing a denial of benefits and remanding for further proceedings, the fourteen-day filing period is tolled until the claimant receives notice of the amount of any benefits award.” Sinkler, 932 F.3d at 85.

Substantively, when reviewing Section 406(b) attorneys’ fees when a claimant retained counsel pursuant to a contingency agreement, courts determine: (1) whether the requested amount exceeds the statutory 25% cap; (2) whether there was fraud or overreaching in the making of the agreement; and (3) whether the requested amount is so large as to be a windfall to the attorney. Wells II, 907 F.2d at 372. “In determining whether there is a windfall that renders a § 406(b) fee in a particular case unreasonable, courts must consider more than the de facto hourly rate.” Fields v. Kijakazi, 24 F.4th 845, 854 (2d Cir. 2022). Instead, in evaluating whether “a relatively high hourly rate” is a windfall “in the context of any given case,” courts should assess: (1) “the ability and expertise of the lawyers and whether they were particularly efficient,” (2) “the nature and length of the professional relationship with the claimant, including representation at the agency level,” (3) “the satisfaction of the disabled claimant,” and (4) “how uncertain it was that the case would result in an award of benefits and the effort it took to achieve that result.” Id. at 854–56.

Additionally, when an attorney seeking a fee award pursuant to Section 406(b) also is awarded fees under the EAJA, “[f]ee awards may be made under both prescriptions, but the claimant's attorney must refund to the claimant the amount of the smaller fee.” Gisbrecht, 535 U.S. at 796; see also Wells v. Bowen, 855 F.2d 37, 48 (2d Cir. 1988) (“Wells I”) (“Once appropriate fees under 42 U.S.C. § 406(b) are calculated, the district court should order [plaintiff's counsel] to return the lesser of either that amount or the EAJA award to his clients.”).

B. Timeliness

As a threshold matter, the Court finds that Binder's motion is timely. “Once counsel receives notice of the benefits award—and, therefore, the maximum [attorneys’] fees that may be claimed—there is no sound reason not to apply Rule 54(2)(B)’s fourteen-day limitations period to a § 406(b) filing[.]” Sinkler, 932 F.3d at 88. The NOA informing Plaintiff of the award is dated March 11, 2024, and Binder received the NOA on the same date. (Binder Affirmation, ECF No. 17-4 ¶ 11; id. Ex. C, ECF No. 17-5 at 7–13.) Defendant does not dispute the motion's timeliness. (See generally Def.’s Resp., ECF No. 18.) Because Binder filed the motion on March 18, 2024, less than 14 days later, the motion is timely.

C. Reasonableness

After carefully reviewing the contingency fee provision of Binder's retainer agreement and the Fields factors, the Court finds that the requested attorneys’ fees award is unreasonable.

Binder seeks $18,099.72 in attorneys’ fees pursuant to Section 406(b) for services rendered in connection with this action and post-remand proceedings before the SSA. (Binder's Mem., ECF No. 17-2 at 3.) Binder avers that upon receipt of the attorney fees, it will refund Plaintiff $655.89, the previously awarded EAJA fees. (Id. at 5.)

Defendant does not oppose or agree to the requested Section 406(b) fees but defers to the Court to determine whether they are reasonable. (Def.’s Resp., ECF No. 18 at 2.) Defendant agrees with Binder on the refund of the EAJA fees to Plaintiff. (Id. at 3.) Defendant also requests that the Court's order indicate the amount of any § 406(b) award it authorizes but decline to include language directing that Defendant “pay” the award. (Id. at 3.) Alternatively, Defendant requests that the Court specifically indicate that any amount it authorizes in § 406(b) fees is to be paid out of Plaintiff's past-due benefits in accordance with agency policy. (Id.)

Pursuant to the Retainer Agreement, Binder seeks $18,099.72, or 12.5% of Plaintiff's $144,797.70 past-due benefits awarded in March 2024. (Binder's Mem., ECF No. 17-2 at 3; Retainer Agt., ECF No. 17-5 at 2 ¶ 1; Binder Affirmation Ex. C, ECF No. 17-5 at 9.) Binder seeks payment for three hours of work from attorneys Charles Binder (1.8 hours) and Daniel Jones (1.2 hours), resulting in an hourly rate of $6,033.24 (i.e., $18,099.72 / 3). (See Binder's Mot. Ex. B., ECF No. 17-5 at 5 (attorney time records).) The 12.5% contingency fee comports with the statutory cap of 25%. 42 U.S.C. § 406(b)(1)(A). The requested fees accrued only for Binder's representation of Plaintiff in this action. Nothing in the record indicates any fraud or overreaching in Binder and Plaintiff coming to an agreement regarding contingency fees. The Court thus finds that the requested fees are reasonable based solely on the contingency arrangement.

However, after carefully reviewing the Fields factors, the Court finds that the requested award amounts to an unreasonable windfall to counsel. First, regarding “the ability and expertise of the lawyers,” Fields, 24 F.4th at 854, the Court acknowledges Binder's substantial expertise in representing plaintiffs in Social Security disability cases. See, e.g., Henrich v. Acting Comm'r of Soc. Sec., No. 22-CV-3472 (AMD), 2024 WL 4043681, at *2–3 (E.D.N.Y. Sept. 3, 2024) (noting Binder's “extensive experience in Social Security disabilities representation”). “The Court also recognizes, however, that Binder's representation of Plaintiff, while efficient, required far less time than the amount typically deemed reasonable for a Social Security appeal in federal court.” Figueroa v. Comm'r of Soc. Sec., No. 22-CIV-3759 (SLC), 2024 WL 5039633, at *3 (S.D.N.Y. Dec. 9, 2024) (collecting cases reflecting an average of at least 30 hours expended in Social Security appeals in district courts). Two weeks after Defendant filed the administrative transcript, the parties stipulated to remand the Commissioner's final decision back to the SSA and the Court entered judgment. (ECF Nos. 13–14.) When counsel represent Social Security disability plaintiffs on a contingency basis, and the federal action resolves successfully with minimal efforts, the potential for a windfall is substantially higher. See Fields, 24 F.4th at 856. For this reason, the first Fields factor warrants a downward adjustment.

The second factor, the nature and length of Binder's attorney-client relationship with Plaintiff, also warrants a downward adjustment. In Fields, the Second Circuit decided that “the significant investment of time and effort in Mr. Fields's case at the agency level further enabled Binder & Binder to operate with efficiency in the federal courts” because “Binder & Binder represented Mr. Fields since the start of agency proceedings in 2011, advocating on his behalf during four separate hearings before ALJs and in multiple petitions to the Appeals Council.” Fields, 24 F.4th at 855. In contrast, Binder's attorney-client relationship with Plaintiff is much less developed. Non-attorney representatives at Binder, Lori Lembeck and John Moran, began representing Plaintiff before the SSA in September 2019, after Plaintiff's past-due benefits started to accrue in 2016, in connection with one hearing before an ALJ on February 19, 2020. (R. at 52, 192–93, 223–24; Binder's Mot. Ex. C., ECF No. 17-5 at 7–8.) Plaintiff retained Binder to represent her in this action only after the Appeals Council of the SSA affirmed the ALJ's denial of Plaintiff's application. (Retainer Agt., ECF No. 17-5 at 2–3.) As such, Binder's relatively short period of representing Plaintiff at the agency level and involvement in one administrative hearing could not amount to the significant attorney-client relationship that enabled Binder to efficiently represent Plaintiff in the federal court. See, e.g., Figueroa, 2024 WL 5039633, at *4 (reducing attorneys’ fees because “Binder did not represent Plaintiff during the entire agency proceedings”); Susca v. O'Malley, No. 20-CV-9592 (AT)(VF), 2024 WL 3905663, at *4 (S.D.N.Y. Aug. 1, 2024), adopted sub nom. by Susca v. Comm'r of Soc. Sec., No. 20-CIV-9592 (AT)(VF), 2024 WL 3904797 (S.D.N.Y. Aug. 22, 2024) (“[Counsel] began its representation of Plaintiff several years after her past-due benefits started to accrue, which is another reason why the de facto hourly rate is unreasonable.”); Nashir v. Berryhill, No. 18-CV-767 (HKS), 2023 WL 2815003, at *2 (W.D.N.Y. Apr. 5, 2023) (“Given that counsel has represented plaintiff for approximately half of the time that past due benefits were accruing, the Court finds it appropriate to reduce counsel's award ․”). Accordingly, the second factor in Fields warrants a reduction in Binder's requested attorney's fees.

Third, Plaintiff's satisfaction with her disability benefits award supports the requested attorneys’ fees. “Although there is no submission from Plaintiff supporting or opposing [Binder's] request for fees, Plaintiff received a very favorable result from this action; she was awarded benefits for the entirety of her alleged disability period.” Munoz v. Comm'r of Soc. Sec., No. 20-CV-2496 (KAM), 2023 WL 5310742, at *3 (E.D.N.Y. Aug. 17, 2023). Specifically, after Binder represented Plaintiff in this federal court action and additional agency proceedings, the SSA awarded her past-due benefits in six figures from July 2016 through January 2024, and future benefits starting in February 2024. (See Binder Affirmation Ex. C, ECF No. 17-5 at 7–9.) Because these results are consistent with the relief Plaintiff sought by retaining Binder, the Court safely presumes Plaintiff is satisfied with her counsel's representation, and no downward adjustment is required. See Bluni v. Comm'r of Soc. Sec., No. 20-CV-2984 (KAM), 2023 WL 8829172, at *3 (E.D.N.Y. Dec. 21, 2023) (presuming plaintiff's satisfaction with counsel who obtained highly favorable result of past-due benefits and future benefits).

As for the final Fields factor, the Court finds that this case does not involve the level of uncertainty or difficulty that justifies the requested attorneys’ fees. Defendant stipulated to remand without counsel's efforts of submitting any brief, “indicating that this case was far less uncertain than the underlying case in Fields and did not require the sustained effort of multiple rounds of representation by Binder to achieve a positive result.” Gray v. Comm'r of Soc. Sec., No. 20-CV-3916 (PKC), 2023 WL 3948796, at *4 (E.D.N.Y. June 12, 2023); Piccolo v. Kijakazi, No. 23-CV-6165 (RPK), 2024 WL 5159439, at *2 (E.D.N.Y. Dec. 18, 2024) (finding relative lack of uncertainty where the federal action “was favorably resolved before counsel filed any brief, with the agency agreeing to a remand”).

Based on the foregoing, the Court finds that Binder's requested attorneys’ fees, with a de facto hourly rate of $6,033.24, constitute an impermissible windfall and requires a downward adjustment. Gray, 2023 WL 3948796, at *4 (rejecting Binder's requested de facto hourly rate of $1,879.58 for 23.7 hours); see also Figueroa, 2024 WL 5039633, at *5 (rejecting Binder's requested de facto hourly rate of $3,686.30 for 2.7 hours, and collecting cases approving hourly rates between approximately $1,400 and $2,100 for counsel representing Social Security benefits plaintiffs). And “while the high hourly rate standing alone is not ‘determinative,’ compensation at that rate would be unreasonable given the Fields factors discussed above.” Piccolo, 2024 WL 5159439, at *2 (citing Figueroa, 2024 WL 5039633, at *5). Furthermore, “[b]enefits that ‘are large in comparison to the amount of time counsel spent on a case’ warrant a ‘downward adjustment’ in attorney's fees awarded.” Dore v. Comm'r of Soc. Sec., No. 21-CV-3928, 2023 WL 2071325, at *1 (E.D.N.Y. Feb. 17, 2023) (citing Gisbrecht, 535 U.S. at 808). The Court finds that $4,500.00, reflecting an effective hourly rate of $1,500 per hour, constitutes a reasonable attorneys’ fee award under these circumstances. See id.; Gray, 2023 WL 3948796, at *4; Figueroa, 2024 WL 5039633, at *5.

Accordingly, the Court respectfully recommends that Binder's requested attorneys’ fees should be reduced to $4,500.00 for the three hours expended.

D. The Language of the Court's Order

Defendant requests that the Court decline to direct the Acting Commissioner to “pay” an award of attorneys’ fees. (Def.’s Resp., ECF No. 18 at 2.) Instead, Defendant requests that the Court specifically order that any amount it authorizes in Section 406(b) fees should be paid out of Plaintiff's past-due benefits in accordance with agency policy. (Id.)

Section 406 allows the Commissioner to withhold up to 25% of past-due benefits to create a fund for the express purpose of “fix[ing] ․ a reasonable fee to compensate such attorney for the services performed.” Mehlrose v. Comm'r of Soc. Sec., No. 20-CV-3406 (WFK)(LGD), 2024 WL 698729, at *5 (E.D.N.Y. Feb. 15, 2024) ((quoting 42 U.S.C. § 406(a)(1)), adopted by 2024 WL 990122 (E.D.N.Y. Mar. 7, 2024)). According to the Commissioner, “benefits withheld is a single pool from which the Commissioner may directly pay attorneys’ fees for both agency representation (Section 406(a) awards) and court representation (Section 406(b) awards).” (Def.’s Resp., ECF No. 18 at 3 (citing Culbertson v. Berryhill, 139 S. Ct. 517, 523 (2019).) However, “the record does not contain any reason to believe that the pool from which counsel's fee would be paid is so depleted that there is any real risk of non-payment.” Rivera v. Saul, No. 20-CV-7215 (CS), 2024 WL 4986967, at *4 (S.D.N.Y. Dec. 5, 2024). The SSA already withheld the 25% past-due benefits for Plaintiff's counsel, which exceeds the amount Binder seeks, and Binder “is not seeking a total fee in excess of 25% under any combined fee sought under both 42 U.S.C. § 406(a) and § 406(b).” (Binder's Mem., ECF No. 17-2 at 5.) Therefore, it is unlikely that the SSA is unable to pay the fees to Binder.

For these reasons, the Court respectfully recommends that the order granting the attorneys’ fees should direct that the fees must be paid in the amount of $4,500 out of Plaintiff's past-due benefits.

E. EAJA Attorneys’ Fee Award

“Once appropriate fees under 42 U.S.C. § 406(b) are calculated, the district court should order [plaintiff's counsel] to return the lesser of either that amount or the EAJA award to his clients.” Wells I, 855 F.2d at 48. As the Supreme Court explained,

Congress harmonized fees payable by the Government under EAJA with fees payable under § 406(b) out of the claimant's past-due Social Security benefits in this manner: Fee awards may be made under both prescriptions, but the claimant's attorney must refun[d] to the claimant the amount of the smaller fee․ Thus, an EAJA award offsets an award under Section 406(b), so that the amount of the total past-due benefits the claimant actually receives will be increased by the EAJA award up to the point the claimant receives 100 percent of the past-due benefits.

Gisbrecht, 535 U.S. at 796 (cleaned up). Pursuant to the retainer agreement, Plaintiff agreed that “in the event the appeal is successful, in that the claim is remanded for further proceedings or payment of benefits, I transfers [sic] and assigns [sic] my interests in any and all Equal Access to Justice Act (“EAJA”) fees ․ to the law firm[.]” (Retainer Agt., ECF No. 17-5, Ex. A at 1 ¶ 4.) The parties agree that Plaintiff should receive $655.89 for the EAJA fees, and nothing in the record suggests that Plaintiff owes any debt that is subject to offset under the Treasury Offset Program. Accordingly, the Court respectfully recommends that Binder should refund Plaintiff the EAJA fees in the amount of $655.89 upon receipt of the attorney fees awarded pursuant to 42 U.S.C. § 406(b).

III. CONCLUSION

For the reasons set forth above, the Court respectfully recommends that: (1) Binder's motion for attorney fees should be granted in part and denied in part, (2) Binder should be awarded $4,500.00 in attorneys’ fees pursuant to 42 U.S.C § 406(b), paid from Plaintiff's past-due benefits per agency policy, and (3) within seven days of receipt of the attorney fees, Binder should refund to Plaintiff $655.89 for the previously awarded attorneys’ fees pursuant to the Equal Access to Justice Act, 28 U.S.C. § 2412.

A copy of this Report and Recommendation is being served on the parties via ECF. Within 14 days of service, any party may serve and file specific written objections to this Report and Recommendation. 28 U.S.C. § 636(b)(1)(C); Fed. R. Civ. P. 72(b). Any requests for an extension of time to file objections shall be directed to Judge Komitee. If a party fails to object timely to this Report and Recommendation, it waives any right to further judicial review of this decision. See Miller v. Brightstar Asia, Ltd., 43 F.4th 112, 120 (2d Cir. 2022).

SO ORDERED.

FOOTNOTES

1.   All citations to documents filed on ECF refer to the ECF document number and pagination in the ECF header, except that citations to the Certified Administrative Record (“R.”) at ECF No. 11 refer to the stamped page number on the bottom right corner of the document.

2.   See 42 U.S.C. § 405(g) (“The court shall have power to enter, upon the pleadings and transcript of the record, a judgment affirming, modifying, or reversing the decision of the Commissioner of Social Security, with or without remanding the cause for a rehearing.”).

3.   See 31 U.S.C. § 3716(c)(3); 31 C.F.R. § 285.4.

MARCIA M. HENRY United States Magistrate Judge