Donald Bergen v. Commissioner of Social Security, (11th Cir. 2006)

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[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

F O R THE ELEVENTH CIRCUIT FILED

U .S . COURT OF APPEALS

E L E V E N T H CIRCUIT

A p r il 4, 2006

N o . 05-14683 T H O M A S K. KAHN

N o n - A r g u m e n t Calendar CLERK

D . C. Docket No. 02-00458-CV-ORL-22-KRS

D O N A L D BERGEN,

Plaintiff-Appellant,

versus

COMMISSIONER OF SOCIAL SECURITY,

Defendant-Appellee.

N o . 05-14684

N o n - A r g u m e n t Calendar

D . C. Docket No. 00-00442-CV-ORL-22-A

JA M E S R. TAYLOR, JR.,

Plaintiff-Appellant,

versus

W IL L IA M A. HALTER, Commissioner of Social Security Administration, Defendant-Appellee.

A p p e als from the United States District Court fo r the Middle District of Florida (A p ril 4, 2006) B efo re DUBINA, HULL and WILSON, Circuit Judges.

P E R CURIAM: D o es 42U.S.C. § 406(b)(1)(A) permit an award of attorney's fees when a d istrict court remands a case to the Commissioner of Social Security (C o m m issio n er) for further proceedings, and the Commissioner subsequently a w a rd s the claimant past-due benefits on remand? This consolidated appeal p resen ts us with an opportunity to answer this precise question definitively. We f in d that § 406(b)(1)(A) permits attorney's fees for past-due benefits after a rem an d .

BACKGROUND D o n ald Bergen and James R. Taylor separately filed applications with the S o cial Security Administration (SSA) for disability benefits. Both of their claims w ere denied initially and on reconsideration, and they requested an administrative h earin g . After an Administrative Law Judge (ALJ) determined that they were not en titled to benefits because they were not disabled, they both filed their respective c o m p la in ts in the district court seeking review of the Commissioner's final d e c is io n .

Richard Culbertson, a lawyer, represented both Bergen and Taylor. Both claim an ts entered into a contingency fee agreement with Culbertson providing for p aym en t of a reasonable fee not in excess of 25 percent of the total of the past-due b en efits to which they would become entitled by reason of a favorable judgment ren d ered in the district court.

In Bergen's case, the district court reversed the Commissioner's decision a n d remanded the case for further proceedings on the merits pursuant to sentence fo u r of 42U.S.C. § 405(g). Bergen then filed a petition for an award of attorney's f ee s under the Equal Access to Justice Act (EAJA), 28U.S.C. § 2412 which was g r a n te d . Subsequently, an ALJ entered a fully favorable decision awarding Bergen d isab ility benefits, which entitled Bergen to past-due benefits as a result of his d is ab ility . But when Culbertson then filed his petition for authorization to charge a reaso n ab le fee for representation before the district court pursuant to § 406(b), the d is tr ic t court denied the petition, finding that the statute does not permit an award o f attorney's fees. The district court also found that even if the statute permitted an aw ard of attorney's fees, the petition was not timely filed in compliance with Fed.

R . Civ. P. 54(d)(2)(B) and M.D. Fla. Local R. 4.18.

L ik e Bergen, Taylor's case was also remanded to the Commissioner of S o c ia l Security after the district court reversed the Commissioner's decision under se n ten ce four of § 405(g). Taylor also filed a petition for an award of attorney's fees under the EAJA but the district court denied the petition on the ground that the C o m m issio n er's position was substantially justified. Taylor appealed this decision to this Court, after which the parties entered into a joint stipulation providing that T a ylo r was entitled to an award of attorney's fees under the EAJA, and the appeal w as dismissed. Later, an ALJ entered a favorable decision awarding Taylor pastd u e disability benefits. But when Culbertson filed a petition for authorization to c h a rg e a reasonable fee for representation of Taylor before the district court p u rsu an t to § 406(b), the district court denied the petition for the same reasons g iv en to Bergen.

B er g en and Taylor then appealed the district court's denial of Culbertson's p etitio n for attorney's fees pursuant to § 406(b), and we consolidated the cases for th e purpose of this appeal.

DISCUSSION T o resolve this appeal, we are called upon to engage in an exercise of statu to ry interpretation. We review the district court's interpretation of a statute de n o v o . Stroup v. Barnhart, 327 F.3d 1258, 1260 (11th Cir.), cert. denied, 540 U.S.

1 0 7 4 (2003). "[I]f the statute speaks clearly to the precise question at issue, we m u s t give effect to the unambiguously expressed intent of Congress." Barnhart v. W a lto n , 535 U.S. 212, 217-18, 122 S. Ct. 1265, 1269, 152 L. Ed. 2d 330 (2002) (in tern al quotations and citation omitted). However, "where Congress has not d irectly addressed the question at issue, the agency's determination of the statute s h o u ld be accorded considerable weight . . . Courts, however need not accept an a g e n c y's interpretation that frustrates the underlying congressional policy." Shoemaker v. Bowen, 853 F.2d 858, 861 (11th Cir. 1988) (citations omitted).

The district court reasoned that 42U.S.C. § 406(b) did not provide the court au th o rity to award attorney's fees because its prior judgment did not amount to a v icto ry for the claimants, but simply reversed and remanded their cases to the SSA f o r further consideration. As the district court literally reads the statute, an award o f attorney's fees is unavailable unless its judgment entitles the claimant to an aw ard of past-due benefits and includes an award of attorney's fees under § 406(b).

The statute provides: W h en ev er a court renders a judgment favorable to a c la im a n t under this subchapter who is represented before th e court by an attorney, the court may determine and a llo w as part of its judgment a reasonable fee for such rep resen tatio n , not in excess of 25 percent of the total of th e past-due benefits to which the claimant is entitled by r ea so n of such judgment, and the Commissioner of Social S ecu rity may . . . certify the amount of such fee for p aym en t to such attorney out of, and not in addition to, th e amount of such past-due benefits.

4 2U.S.C. § 406(b)(1)(A).

A lth o u g h we have never addressed the precise issue of whether § 4 0 6 (b )( 1 )( A ) authorizes an award of attorney's fees where the district court's ju d g m en t remanding the case to the Commissioner does not explicitly mention atto rn ey's fees, we have noted that the congressional intent behind § 406(b) is, in p a r t, "to encourage effective legal representation of claimants by insuring lawyers th at they will receive reasonable fees directly through certification by the S e cr eta ry ." Dawson v. Finch, 425 F.2d 1192, 1195 (5th Cir. 1970) (holding that a d istrict court may not authorize an attorney to charge fees for representation in C o u r t when the Commissioner has already authorized that attorney to charge fees fo r representation in administrative proceedings, and declining to reach the S ec re tary 's contention that § 406(b) does not allow a Court to authorize attorney's fees unless it renders a judgment on the merits favorable to the claimant). We have also noted that one of § 406(b)'s goals is to protect claimants by limiting the am o u n t attorneys may collect. See Shoemaker, 853 F.2d at 860-61 (holding that a d istrict court may consider interim benefits received pursuant to 42U.S.C. § 4 2 3 ( g ) in awarding attorney's fees under § 406(b)). Moreover, the Supreme Court h as held that a remand from the district court to the SSA under sentence four of 42 U .S .C . § 405(g), as happened here, is a favorable judgment for the claimant. See S h a la la v. Schaefer, 509 U.S. 292, 301-02, 113 S. Ct. 2625, 2631-32, 125 L. Ed. 2d 2 3 9 (1993).

Other circuits considering similar cases have unanimously held that § 406(b) allo w s a district court to authorize attorney's fees following a claimant's success o n a sentence four remand to the SSA. See Rohrich v. Bowen, 796 F.2d 1030, 1 0 3 1 , (8th Cir. 1986). The 7th Circuit has held: a court cannot usually "determine" the amount of the fee aw ard at the time of the judgment or within ten days.

Reading the statute as a whole, we do not believe that C o n g ress meant that the only time at which fees could be aw ard ed is the time of the judgment. By authorizing the atto rn ey to be paid directly out of the claimant's past-due b e n e f its , Congress intended to make it easier, not harder fo r attorneys to collect their fees. A more appropriate read in g of § 406(b)(1) is that a judgment favorable to the claim an t is merely a prerequisite to a fee award under the s ta tu t e .

S m ith v. Bowen, 815 F.2d 1152, 1155 (7th Cir. 1987) (per curiam). Contra M cG ra w v. Barnhart, 370 F.Supp.2d 1141, 1144 (N.D. Okla. 2005) ("A judgment w h ich merely remands the action for further proceedings by the Social Security A d m in istratio n does not equate to a claimant being entitled to past due benefits `by reaso n of' the Court's judgment."); but see McPeak v. Barnhart, 388 F.Supp.2d 7 4 2 , 745-46 n.2 (S.D.W.Va. 2005) ("[The McGraw court is] reading [§ 406(b)] too n a r ro w ly without considering the sorts of judgments which Congress has allowed C o u r ts to make in social security cases."). Like the 7th Circuit, the 4th Circuit has h eld that § 406(b)(1) permits an award of attorney's fees when a remand results in an administrative award of benefits. Conner v. Gardner, 381 F.2d 497, 500 (4th C ir. 1967) ("To permit counsel to receive a reasonable fee for [services rendered in th e district court] will not defeat [§ 406(b)'s] purpose, but will serve to advance it." ) W e agree with our sister circuits' interpretation of the statute. Reading § 4 0 6 (b )(1 )(A ) literally, as did the district court, would frustrate the underlying co n g ressio n al policy of "encourag[ing] effective legal representation of claimants b y insuring lawyers that they will receive reasonable fees directly through c er tif ic atio n by the Secretary." Dawson, 425 F.2d at 1195; see also Shoemaker, 8 5 3 F.2d at 860-61. Limiting § 406(b) fees to cases in which the Court itself aw ard s past-due benefits would also discourage counsel from requesting a remand in cases where it is appropriate.

Moreover, we, along with the other circuits, have generally assumed without ad d ressin g the issue that fees are available under § 406(b) because past-due b en efits have been conspicuously awarded without objection by the SSA. See, e.g ., McGuire v. Sullivan, 873 F.2d 974, 975 (7th Cir. 1989); Straw v. Bowen, 866 F .2 d 1167, 1168-69 (9th Cir. 1989); Shoemaker, 853 F.2d at 859-61; MacDonald v . Weinberger, 512 F.2d 144, 145-46 (9th Cir. 1975). Under the weight of this au th o rity, the SSA, in its brief on this appeal, does not oppose an award of reaso n ab le attorney's fees under § 406(b).

The district court also reasoned that the availability of attorney's fees to a su ccessfu l claimant under the subsequently enacted EAJA makes § 406(b) atto rn ey's fees unnecessary. But EAJA fees are available only when the g o v ern m en t's position is not "substantially justified." Thus, EAJA fees are not av ailab le every time a claimant prevails § 406(b)(1)(A) since the EAJA was enacted in 1965. The Supreme Court co n clu d ed that Congress harmonized awards for attorney's fees under the EAJA w ith awards under § 406(b) by requiring the claimant's attorney "to refun[d] to the c la im a n t the amount of the smaller fee." Gisbrecht v. Barnhart, 535 U.S. 789, 796, 1 2 2 S. Ct. 1817, 1822, 152 L. Ed. 2d 996 (2002) (internal quotation and citations o m itte d , brackets in original).

W e find that 42U.S.C. § 406(b) authorizes an award of attorney's fees w h ere the district court remands the case to the Commissioner of Social Security fo r further proceedings, and the Commissioner on remand awards the claimant p ast-d u e benefits.

II.

T h e district court made an alternative finding, that even if § 406(b) permitted a u th o r iz atio n of attorney's fees, Culbertson's petitions would not be granted b e c au s e they were untimely filed. To support its finding, the district court relied u p o n Fed. R. Civ. P. 54(d)(2)(B) which provides: "Unless otherwise provided by s ta tu te or order of the court, the motion [for attorney's fees] must be filed no later th an 14 days after entry of judgment . . ." The Advisory Committee Notes provide th at one of the purposes for this provision "is to assure that the opposing party is in f o r m e d of the claim before the time for appeal has elapsed." See Fed. R. Civ. P.

5 4 (d )(2 )(B ), advisory committee notes to 1993 amendment. The district court also relied upon its Local Rule 4.18, "Applications For Costs Or Attorney's Fees," w h ich provides: In accordance with Fed. R. Civ. P. 54, all claims for costs o r attorney's fees preserved by appropriate pleading or p retrial stipulation shall be asserted by separate motion or p etitio n filed not less than fourteen (14) days following th e entry of judgment. The pendency of the appeal from ju d g m en t shall not postpone the filing of a timely a p p lic atio n pursuant to this Rule.

M .D . Fla. Local R. 4.18(a). But if one of the purposes of Rule 54 is to "assure that th e opposing party is informed of the claim before the time for appeal has elapsed," an d Local Rule 4.18 is based on Rule 54, it is hard to see when the 14-day time lim it would apply to petitions filed pursuant to § 406(b). Although the rules are n ecessary for the efficient administration of justice, their strict application in the p resen t instance conflicts with congressional intent in enacting § 406(b) and is im p ractical in light of the exigencies particular to post-judgment proceedings in S o cial Security cases. Section 406(b) does not include any provisions concerning tim e limitations. As in Bergen's and Taylor's cases, when the district court rem an d s to the SSA under sentence four of § 405(g), determining if and when the S S A would grant past-due benefits is rarely possible. See Smith, 815 F.2d at 115556.

Therefore, we find error in the application of a strict 14-day time limitation.

I n applying the limitation to § 406(b), the period should begin to run from the day th at the award notice is issued. Therefore, Culbertson's petition relating to the B erg en award (filed 10 days after the SSA issued the award notice) was timely but h is petition relating to the Taylor award (filed 29 days after the SSA issued the co rrected award notice) was not.

CONCLUSION W e join the unanimous view of the Courts of Appeals that have addressed th e issue to find that § 406(b) authorizes attorney's fees where a district court o rd ers a remand to the Commissioner of Social Security for further proceedings, and the Commissioner awards benefits on remand. We further find that C u lb ertso n 's petition relating to the Bergen award was timely filed while his p etitio n relating to the Taylor award was not. Therefore, we vacate and remand for p ro ceed in g s consistent with this opinion.

V A C A T E D AND REMANDED.

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