The opinion of the court was delivered by: TEITELBAUM
Presently before the Court are petitions for attorneys' fees and costs pursuant to 42 U.S.C. § 406(b)(1) by counsel for the above plaintiffs, all of whom prevailed in social security disability cases.
The petitions will be denied, without prejudice, for reasons set forth below. Counsel instead will be granted leave to file within thirty (30) days amended petitions which comply with the requirements set forth below.
42 U.S.C. § 406(b)(1) provides in relevant part that:
Whenever a court renders a judgment favorable to a claimant under this subchapter who was represented before the court by an attorney, the court may determine and allow as part of its judgment a reasonable fee for such representation, not in excess of 25 percent of the total of the past-due benefits to which the claimant is entitled by reason of such judgment. . . .
Rubber-stamp approval of the statutory maximum allowed in social security disability case should be avoided. It is the court's responsibility to see that unreasonably large fees are not collected by attorneys who represent often indigent social security disability claimants. See Redden v. Celebrezze, 370 F.2d 373-375 (4th Cir. 1966).
In general, those standards and procedures set forth in Lindy Bros. Builders, Inc. of Phila. v. American Radiator & Standard Sanitary Corp., et al (Lindy I), 487 F.2d 161 (3d Cir. 1973) and progeny govern the award of fees in social security disability cases.
The court first must determine how many hours were reasonably spent, by whom, and in what manner. Lindy, 487 F.2d at 167. Next, the court must determine the reasonable hourly value of those services. Such determinations must be made for each attorney and for every category of activity. Different categories of activity might require different hourly rates. Lindy I, 487 F.2d at 167.
The product of the above yields what is known as the "lodestar". Lindy I, 487 F.2d at 169.
The district court cannot, when considering the hours spent, award fees for services performed at the administrative level before the Secretary. See MacDonald v. Weinberger, 512 F.2d 144, 146 (9th Cir. 1975). A separate application must be made to the Secretary for services performed at the administrative level. However, the aggregate of the fees awarded by the district court and by the Secretary may not exceed the statutory maximum of 25 percent of claimant's past-due benefits. See Morris v. Social Security Administration, 689 F.2d 495, 496 (4th Cir. 1982).
Once it has determined the lodestar, the court must take two other factors into consideration in deciding whether to "adjust" the lodestar. It must determine the probability that the litigation would be successful and the quality of ...