The opinion of the court was delivered by: SIMMONS
This is a petition for Court approval of reasonable attorney fees to the prevailing attorneys in a social security disability case.
The claimant, Ivona Kemp, by her attorneys, filed a complaint to review the final decision of the Secretary of Health and Human Services denying her claim for disability insurance benefits. This review was successful and judgement was entered for the claimant. Thereafter, the prevailing attorneys submitted a petition for attorney fees in the amount of $2,881.10. This figures represents 25% of the past-due benefits awarded the claimant and the amount negotiated by the claimant and her attorneys as compensation for their services. In support of their application for fees, the attorneys submitted a detailed statement of the time expended pursuing both administrative and judicial remedies, a contingent fee agreement between the claimant and her attorneys, and the Social Security Award Certificate issued by the Secretary.
After reviewing the petition for attorney fees and the accompanying documentation, the United States Magistrate issued a report and recommendation reducing the amount of the attorney fees to $1,242.50. Reasoning that a court may only approve attorney fees for the time devoted exclusively to prosecuting an action before the district court, the magistrate disallowed attorney fees for the time devoted to prosecuting the claim before the Social Security Administration. Relying on the strength of Morris v. Social Security Administration, 689 F.2d 495 (4th Cir. 1982), and Oroshnik v. Schweiker, 569 F. Supp. 399 (D. N.J. 1983), the magistrate believed it improper for the court to consider a request for fees generated before the administrative agency. A request for such fees, reasoned the magistrate, must be approved by the appropriate agency, not the court. This court does not agree.
Authority to Award Attorney Fees.
The sole question raised by this petition for attorney fees is whether a district court is empowered to include services performed before the Secretary in the court's award of reasonable attorney fees? The short answer is yes. Although this issue has not yet been addressed by the Third Circuit Court of Appeals, the respective powers of the courts and the Secretary to consider an attorney's efforts in all forums has been addressed by other circuits.
The Fourth Circuit Court of Appeals has previously held that a district court may not consider services rendered before the Social Security Administration in its determination of a reasonable attorney fee; the Secretary alone is vested with the power to make awards for services rendered before the administration. See generally, Morris v. Social Security Administration, 689 F.2d 495, 497 (4th Cir. 1982); Whitt v. Califano, 601 F.2d 160, 161-62 (4th Cir. 1979); McKittrick v. Gardner, 378 F.2d 872 (4th Cir. 1967). The Fourth Circuit is not alone in its view. Following the Fourth Circuit's lead, other courts have similarly held that the district court lacks the authority to make allowance for an attorney's services rendered before the Secretary. See Gardner v. Menendez, 373 F.2d 488 (1st Cir. 1967); Oroshnik v. Schweiker, 569 F. Supp. 399, 400-01 (D. N.J. 1983).
The Sixth Circuit Court of Appeals has, however, expressly rejected the Fourth Circuit's view and adopted a rule that is easy to apply, promotes economy of effort and, most importantly, carries out the intendment of Congress. Addressing this same issue, the Sixth Circuit, in Webb v. Richardson, 472 F.2d 529, 536 (6th Cir. 1972) has held that "the tribunal making [an attorney fees] award can consider all services performed by the attorney from the time the claim was filed with the Social Security Administration" until the claim is resolved and the award is made. The Sixth Circuit's construction is a better view of the law and is accordingly adopted by this Court.
Prior to 1965, the Secretary was authorize to set a maximum fee an attorney could charge for his representation of a claimant before the Administration. See Social Security Act, 42 U.S.C. § 406 (1964). The pre-1965 Act provided no maximum attorney fees other than that fixed by the Secretary. There were no provisions in the Social Security Act authorizing a court to award attorney fees for the prosecution of a successful claim before the court. Hence, the attorney and his client were free to negotiate the attorney fees for in-court representation. Absent legislation governing attorney fees for in-court representation attorneys were negotiating "inordinately large fees" under contingent fee agreements. Often an attorney would charge a fee for representing the claimant before the Secretary and a separate fee for in-court representation. See S. Rep. No. 404, 89th Cong., 1st Sess., reprinted in 1965 U.S. Code Cong. & Ad. News, 1943, 2062. In 1965 Congress addressed this problem.
After the 1968 amendment, neither the district court nor the Secretary could collectively award attorney fees in excess of 25% of the claimant's past-due benefits. See Morris v. Social Security Administration, 689 F.2d 495, 497 (4th Cir. 1982); Webb v. Richardson, 472 F.2d 529 (6th Cir. 1972); Dawson v. Finch, 425 F.2d 1192, 1195 (5th Cir.), cert. denied, 400 U.S. 830, 91 S. Ct. 60, 27 L. Ed. 2d 60 (1970). By this legislation, Congress ...