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BAILEY v. HECKLER

November 6, 1985

EARL J. BAILEY, Plaintiff,
v.
MARGARET HECKLER, Secretary of Health and Human Services, Defendant



The opinion of the court was delivered by: COHILL

 COHILL, C.J.

 I.

 Plaintiff, Earl J. Bailey, brought this action pursuant to 42 U.S.C. § 405(g), seeking judicial review of the Secretary's final decision denying Plaintiff's claim for disability benefits. Summary judgment subsequently was entered for Plaintiff and against Defendant.

 Presently before the Court is a petition for attorney's fees pursuant to 42 U.S.C. § 406(b)(1) filed by Plaintiff's counsel, Gilbert E. Caroff, Esquire. For the reasons set forth below, the petition will be denied, without prejudice.

 II.

 42 U.S.C. § 406(b)(1) provides in pertinent 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. . . .

 In general, those standards and procedures set forth in Lindy Bros. Builders, Inc. of Philadelphia v. American Radiator & Standard Sanitary Corp., 487 F.2d 161 (3d Cir. 1973) (Lindy I), Lindy Bros. Builders, Inc. of Philadelphia v. American Radiator & Standard Sanitary Corp., 540 F.2d 102 (3d Cir. 1976) (en banc) Lindy II), and their progeny govern the award of attorney's fees in social security disability cases in this circuit.

 Under those standards, the Court first must determine how many hours were reasonably spent, by whom, and in what manner. Lindy I, 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. Id.

 The district court can approve counsel's requests for fees only for services performed in the trial or appellate courts; it cannot award fees for services performed at the administrative level before the Secretary. Guido v. Schweiker, 775 F.2d 107 (3d Cir. 1985). A separate application must be made to the Secretary for services performed in the administrative phase. Id. However, the aggregate of the fees awarded by the district court and by the Secretary may not exceed the statutory maximum of 25% of the claimant's past-due benefits. Campbell v. Heckler, 603 F. Supp. 1388, 1390 (M.D. Pa. 1985); Kemp v. Schweiker, 587 F. Supp. 778 (W.D. Pa. 1984); Oroshnik v. Schweiker, 569 F. Supp. 399, 400 (D.N.J. 1983).

 The fee applicant has the burden of producing evidence supporting the hours worked and rates claimed, Hensley v. Eckerhart, 461 U.S. 424, 433, 76 L. Ed. 2d 40, 103 S. Ct. 1933 (1983); M.S.R. Imports, Inc. v. R.E. Greenspan Co. Inc., 574 F. Supp. 31 (1983), as well as the burden of persuasion, see In re Fine Paper Antitrust Litigation, 751 F.2d 562, 585 (3d Cir. 1984).

 The product of the number of hours reasonably expended and the reasonable hourly rate of compensation yields what is known as the "lodestar," the presumed reasonable fee. Blum v. Stenson, 465 U.S. 886, 104 S. Ct. 1541, 79 L. Ed. 2d 891 (1984).

 Once it has determined the lodestar, the Court must take two other factors into consideration before making a final determination of the attorney's fee award. It must determine the contingent nature of success - that is, the probability of success, viewed at the time of filing the suit, and the quality of the work performed by counsel and then, if necessary, adjust the lodestar accordingly by means of an appropriate multiplier. Lindy I, 487 F.2d at 168-69; Lindy II, 540 F.2d at 116-18. The contingency factor involves an assessment of the legal and financial burdens assumed by Plaintiff and his counsel in pursuing the action. See, Lindy II, 540 F.2d at 117. Contingency of success can properly justify a lodestar increase but not a decrease. Delaware Valley Citizens' Council for Clean Air v. Pennsylvania, 762 F.2d 272 (3d Cir. ...


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