Caudy v. Colvin

Background

An Administrative Law Judge denied Robert Caudy’s application for Social Security disability benefits. Caudy sought judicial review under 42 U.S.C. § 405(g). While his request for judgment was partly briefed, the parties agreed to a remand under “sentence four” of that statute, and the court entered judgment remanding the matter to the Commissioner of Social Security for further proceedings.

Caudy’s attorney, Irwin M. Portnoy, later received $7,150 under the Equal Access to Justice Act, a law that permits certain attorney-fee awards paid by the government. On remand, the Social Security Administration vacated the denial, conducted further proceedings, and ultimately awarded Caudy disability benefits, including past-due benefits. The agency withheld $65,815.65 while the court considered the attorney-fee request.

Fee Motion

Portnoy moved for $42,590 under 42 U.S.C. § 406(b). That statute permits a court to approve a reasonable fee for an attorney who represented a claimant in court, with the fee paid from the claimant’s past-due benefits and limited to 25% of those benefits. Caudy had agreed to a contingent-fee arrangement under which Portnoy’s fee would be the greater of 25% of past-due benefits or the amount obtained under the Equal Access to Justice Act.

The court evaluated whether the requested fee was reasonable. It considered the character of the representation and results achieved, whether counsel caused unreasonable delay, and whether the fee would be an improper windfall compared with the work performed. Portnoy and his colleague recorded 42.4 hours of work in the federal case, most of it devoted to the request for judgment and negotiating the remand.

Court’s Analysis

The court found that the requested fee represented approximately 17.93% of Caudy’s past-due benefits, below both the statutory 25% limit and the percentage in the fee agreement. The court found that the representation produced a favorable result, that there was no suggestion of unreasonable delay, and that the motion for judgment included developed facts and tailored legal arguments rather than only boilerplate material.

The court also considered Portnoy’s experience and the fact that he represented Caudy through multiple proceedings without a guaranteed recovery. Although $42,590 for 42.4 hours equaled a de facto hourly rate of $1,004.48, the court noted that other courts had approved similar or higher rates. It concluded that the hourly rate alone did not justify reducing the contingent fee.

Disposition

Judge Alvin K. Hellerstein granted counsel’s motion for attorney fees and approved an award of $42,590. The Commissioner must pay Portnoy that amount from Caudy’s past-due benefits. After receiving the award, Portnoy must refund Caudy the $7,150 previously awarded under the Equal Access to Justice Act. The Clerk was directed to close the open motion and keep the case closed.