Lanham v. Secretary of Health & Human Services

145 F.R.D. 409, 1992 U.S. Dist. LEXIS 21356, 1992 WL 403305
CourtDistrict Court, E.D. Michigan
DecidedOctober 26, 1992
DocketNo. 91-CV-71198-DT
StatusPublished

This text of 145 F.R.D. 409 (Lanham v. Secretary of Health & Human Services) is published on Counsel Stack Legal Research, covering District Court, E.D. Michigan primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lanham v. Secretary of Health & Human Services, 145 F.R.D. 409, 1992 U.S. Dist. LEXIS 21356, 1992 WL 403305 (E.D. Mich. 1992).

Opinion

MEMORANDUM OPINION AND ORDER

PEPE, United States Magistrate Judge.

Plaintiff’s attorney has applied for approval of attorney’s fees in the amount [410]*410of $5,136.00 pursuant to 42 U.S.C. § 406(b)(1). Defendant has not objected to plaintiff's request. Despite the absence of an objection, however, a district court must review each case to determine the amount of a reasonable fee, and clearly state the basis for its determination. See, Glass v. Secretary of HHS, 822 F.2d 19 (6th Cir. 1987); Dearing v. Secretary, 815 F.2d 1082 (6th Cir.1987); In re Horenstein, 810 F.2d 73 (6th Cir.1986).

The combined benefits awarded to the plaintiff, his wife, and his child total $20,-544.00. A non-attorney, Richard J. Humanic, represented the plaintiff at the administrative level. After a hearing, an administrative law judge awarded the plaintiff and his dependents benefits from April 1990 to March 1992. Plaintiff pursued his case to the district court, where he was represented by an attorney, Gerald Benjamin. At this level, plaintiff and his dependents succeeded in obtaining benefits for nine extra months, from July 1989 through March 1990.

The Social Security Administration (SSA) has refused to award fees to Mr. Humanic for his work at the administrative level because the case ultimately went to the district court, and the district court awarded benefits. See Plaintiffs Motion, Exhibit C. According to a letter from Norma Onley, an Attorney Fee Officer with SSA, this Court must fix the fees for representation at both the administrative and district levels. See Plaintiff’s Motion, Exhibit C. Both Mr. Humanic and Mr. Benjamin had contingency fee agreements with plaintiff that set the fees at 25% of the total benefits obtained through the representation. Consequently, Mr. Benjamin has moved this Court for attorney’s fees in the amount of 25% of the total benefits awarded, which he will then split with Mr. Humanic in an unspecified manner. SSA’s Interpretation of Webb

As an initial matter, I note that this unusual case arises from an apparent misapplication of Webb v. Richardson, 472 F.2d 529 (6th Cir.1972), by SSA. In Webb, the Sixth Circuit held that under § 406(b)(1) the Court may award a reasonable attorney’s fee “for all the representation in the case” provided at both the administrative and the judicial levels. 472 F.2d at 536-37. Indeed, the court went so far as to hold that “the tribunal that ultimately upholds the claim for benefits is the only tribunal that can approve and certify payment of an attorney fee____” 472 F.2d at 536. The Sixth Circuit reaffirmed Webb in Rodriquez v. Bowen, 865 F.2d 739 (6th Cir.1989) (en banc), and in In re Horenstein, 810 F.2d 73 (6th Cir.1986).

SSA denied Mr. Humanic’s claim for fees based on Acquiescence Ruling 87-1(6), SSA Pub. No. 65-002. This document, which took effect January 6, 1987, discusses the Sixth Circuit’s decision in Webb, how Webb differs from SSA policy, and how SSA will apply Webb within the Sixth Circuit. In this last section, the Acquiescence Ruling states:

In all cases, the tribunal (meaning either the Federal Court system or the Social Security Administration) which.ultimately allows the individual’s claim will set a single attorney’s fee covering services provided before either or both tribunals during the entire appeals process.

AR 87-1(6), p. 3.

In the present case, the claimant was awarded benefits at both levels. These awards were not overlapping, but were for two discrete time periods. Webb did not address this situation. Rather, Webb spoke to the situation where a claimant was denied benefits at the administrative level, and was ultimately awarded benefits at the court level. 472 F.2d at 530-31. In issuing its decision, the Sixth Circuit was concerned with the possibility of an attorney recovering 25% of past due benefits from the court for representation before the court, and then recovering another percentage of the past due benefits from SSA for representation at the administrative level. 472 F.2d at 536. The court felt the rule framed in Webb would, among other things, avoid duplicative proceedings and would effectuate Congress’ intent to limit attorney fees to 25% of the past due award. 472 F.2d at 536. The Secretary’s Acquiescence Ruling also fails to anticipate the [411]*411situation where discrete benefits are awarded at the administrative and court levels.

One reading of Webb would actually forbid me to award any fees to Mr. Humanic, since he obtained benefits for the claimant at the administrative level. Under this interpretation, I could only award Mr. Benjamin up to 25% of the nine months of benefits he obtained for the claimant in federal court. Only SSA could award Mr. Humanic 25% of the twenty-four months of benefits he obtained at the administrative level. This reading is probably the best under these circumstances, as it would avoid many of the problems I address in the rest of this opinion. However, in the interests of fairness, I will accept SSA’s interpretation of Webb for purposes of this case only, and will not keep Mr. Humanic in limbo awaiting his fees. Thus, I will award fees to Mr. Benjamin for both his and Mr. Humanic’s efforts on behalf of Mr. Lanham. Mr. Benjamin is directed to split these fees with Mr. Humanic according to whatever arrangements the two men have agreed upon.

Analysis of Appropriate Fees

Mr. Benjamin’s petition for fees summarizes existing Sixth Circuit law, concluding with Hayes v. Secretary of HHS, 916 F.2d 351 (6th Cir.1990). In Hayes, the Sixth Circuit clarified its previous decision in Rodriquez v. Bowen, 865 F.2d 739 (6th Cir.1989) (en banc), by explicitly setting forth the starting point for district courts analyzing fee petitions when a contingency fee agreement exists between the attorney and the social security claimant. The Sixth Circuit felt that clarification was needed because of the “confusion [which] has arisen from the latitude we have permitted the courts.” 916 F.2d at 355. Lower courts had issued very diverse opinions regarding what made a fee unreasonable under Rodriquez. Consequently, the Court stated

We believe that, under Rodriquez, a windfall can never occur when, in a case where a contingent fee contract exists, the hypothetical hourly rate determined by dividing the number of hours worked for the claimant into the amount of the fee permitted under the contract is less than twice the standard rate for such work in the relevant market.

916 F.2d at 355.

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145 F.R.D. 409, 1992 U.S. Dist. LEXIS 21356, 1992 WL 403305, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lanham-v-secretary-of-health-human-services-mied-1992.