Sinkler v. Berryhill , 932 F.3d 83 ( 2019 )

18-2044-cv
Sinkler v. Berryhill
In the
United States Court of Appeals
for the Second Circuit
AUGUST TERM 2018
No. 18‐2044‐cv
LAKISHA JANEY SINKLER,
Plaintiff‐Appellant,
v.
NANCY A. BERRYHILL, Acting Commissioner of Social Security,
Defendant‐Appellee.
On Appeal from the United States District Court
for the Western District of New York
ARGUED: JUNE 19, 2019
DECIDED: AUGUST 2, 2019
Before: CABRANES, RAGGI, and DRONEY, Circuit Judges.
____________
On appeal from a judgment of the United States District Court
for the Western District of New York (Wolford, J.) denying a
successful Social Security claimant’s 42 U.S.C. § 406(b) application for
attorney’s fees as untimely, appellant challenges the application of the
fourteen‐day filing period prescribed by Fed. R. Civ. P. 54(d)(2)(B) to
§ 406(b) attorney’s fee motions.
AFFIRMED.
MELISSA A. PALMER (Howard D. Olinsky,
Olinsky Law Group, on the brief), for Plaintiff‐
Appellant.
HEETANO SHAMSOONDAR, for James P.
Kennedy, Jr., United States Attorney,
Western District of New York, for Defendant‐
Appellee.
REENA RAGGI, Circuit Judge:
Appellant Lakisha Janey Sinkler, who successfully litigated her
claim to supplemental Social Security income, now appeals from a
judgment of the United States District Court for the Western District
of New York (Elizabeth A. Wolford, Judge), denying as untimely her
application for attorney’s fees pursuant to 42 U.S.C. § 406(b). See
Sinkler v. Berryhill, 305 F. Supp. 3d 448, 453–59 (W.D.N.Y. 2018),
reconsideration denied 317 F. Supp. 3d 687 (W.D.N.Y. 2018).
2
Specifically, Sinkler challenges the district court’s application of Fed.
R. Civ. P. 54(d)(2)(B)’s fourteen‐day filing period to her fee
application, arguing in favor of an unspecified “reasonable” period
pursuant to Fed. R. Civ. P. 60(b). Our sister circuits are divided on
the question of which of these two rules of procedure properly
determines the timeliness of § 406(b) fee applications. Compare Walker
v. Astrue, 593 F.3d 274, 280 (3d Cir. 2010) (applying Rule 54), Pierce v.
Barnhart, 440 F.3d 657, 663 (5th Cir. 2006) (same), and Bergen v. Comm’r
of Soc. Sec., 454 F.3d 1273, 1277 (11th Cir. 2006) (same), with McGraw v.
Barnhart, 450 F.3d 493, 505 (10th Cir. 2006) (applying Rule 60(b)).
Today, we join those circuits applying Rule 54. In doing so, we
recognize that the rule’s fourteen‐day filing period is subject to
equitable tolling. See Walker v. Astrue, 593 F.3d at 280. Where, as here,
a Social Security claimant secures a judgment reversing a denial of
benefits and remanding for further proceedings, the fourteen‐day
filing period is tolled until the claimant receives notice of the amount
of any benefits award. That is because the benefits award amount is
necessary to identify the maximum attorney’s fee that may be
awarded under § 406(b).
Sinkler’s § 406(b) fee application having been filed well beyond
the fourteen days prescribed by Rule 54(d)(2)(B), even when so tolled,
we affirm the judgment denying Sinkler’s attorney’s fee application
as untimely. No different conclusion would obtain even on
reasonableness review because Sinkler fails to come forward with a
factual basis for deeming her six‐month filing delay reasonable.
3
Background
On August 8, 2014, Sinkler initiated this action for judicial
review of a decision of the Social Security Administration (“SSA”)
denying her application for supplemental social security income. On
June 2, 2015, the district court entered a “sentence four” final
judgment in her favor, reversing the denial of benefits and remanding
the case for further proceedings. See 42 U.S.C. § 405(g).1 On remand,
an Administrative Law Judge ruled, in a decision dated November 7,
2016, that Sinkler was entitled to supplemental social security income.
Approximately six weeks later, on December 28, 2016, the
Commissioner of Social Security (“Commissioner”) issued a letter
advising Sinkler of her entitlement to $67,404 in past‐due benefits.
Sinkler’s counsel received this letter on January 3, 2017.
Not until six months later, however, on July 6, 2017, did Sinkler
apply to the district court for attorney’s fees, requesting the statutory
maximum of 25% of the past‐due benefits award, or $16,851. See id.
§ 406(b).2 The district court denied the motion as untimely, holding
1 “Sentence four” of § 405(g) empowers a court to enter “a judgment affirming,
modifying, or reversing the decision of the Commissioner of Social Security, with
or without remanding the cause for a rehearing.” 42 U.S.C. § 405(g); see Raitport v.
Callahan, 183 F.3d 101, 103–04 (2d Cir. 1999) (distinguishing sentence four remand
from sentence six remand, under which court retains jurisdiction).
2 Section 406(b) states in pertinent part as follows:
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
4
that (1) Sinkler’s application was outside the fourteen‐day limitations
period prescribed by Fed. R. Civ. P. 543; and, in any event, (2) Sinkler’s
delay in seeking fees was unreasonable. See Sinkler v. Berryhill, 305 F.
Supp. 3d at 453–59. Upon denial of reconsideration, see Sinkler v.
Berryhill, 317 F. Supp. 3d at 687, this timely appeal followed.
Discussion
While we review the denial of an attorney’s fee award
deferentially for abuse of discretion, we consider underlying
questions of law de novo. See Fresno Cty. Empls.’ Ret. Ass’n v.
Isaacson/Weaver Family Tr., 925 F.3d 63, 67 (2d Cir. 2019). Because this
appeal turns on the legal interpretation of § 406(b) and Rule 54, our
review is de novo.
Rule 54(d)(2)(B) Prescribes the Filing Time for § 406(b)
Motions
As the text quoted supra at note 2 indicates, § 406(b) authorizes
a court that enters a judgment favorable to a social security claimant
to award, “as part of its judgment,” a reasonable fee for counsel’s
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, and the Commissioner . . . may . . .
certify the amount of such fee for payment to such attorney out of,
and not in addition to, the amount of such past‐due benefits.
42 U.S.C. § 406(b)(1)(A).
3 The Rule states in pertinent part: “Unless a statute or a court order provides
otherwise, [a motion for attorney’s fees] must: (i) be filed no later than 14 days
after the entry of judgment.” Fed. R. Civ. P. 54(d)(2)(B).
5
representation before the court, not to exceed 25% of the total past‐
due benefits to which the claimant is entitled “by reason of such
judgment.” 42 U.S.C. § 406(b)(1)(A); see Gisbrecht v. Barnhart, 535 U.S.
789, 807–08 (2002) (observing that provision protects against
“inordinately large fees” and affords “independent check” that fee
agreements “yield reasonable results”). That section further
authorizes the Commissioner to certify for such a court‐awarded fee
to be paid out of a past‐due benefits award. See 42 U.S.C.
§ 406(b)(1)(A); 20 C.F.R. § 404.1728(b).4
Where, as here, a district court judgment reverses a denial of
benefits to a claimant and remands for further agency consideration
of benefits, the parties—as well as the seven of our sister circuits to
have considered the question—agree that the district court may await
conclusion of the remand proceedings to consider a § 406(b)
attorney’s fee application. See Jackson v. Astrue, 705 F.3d 527, 531 (5th
Cir. 2013); Bergen v. Comm’r of Soc. Sec., 454 F.3d at 1276–77 (11th Cir.
2006); McGraw v. Barnhart, 450 F.3d at 501–502 (10th Cir. 2006); Smith
v. Bowen, 815 F.2d 1152, 1155 (7th Cir. 1987); Fenix v. Finch, 436 F.2d
831, 835 (8th Cir. 1971); Philpott v. Gardner, 403 F.2d 774, 775 (6th Cir.
4 Section 406(a) separately authorizes the Commissioner to award fees for an
attorney’s representation before the Commissioner. See 42 U.S.C. § 406(a); 20 C.F.R.
§§ 404.1720, 404.1725. Those fees are also capped at 25% of past‐due benefits,
although the “aggregate amount of fees for both stages of representation” is not so
capped. Culbertson v. Berryhill, 139 S. Ct. 517, 519 (2019). In practice, the SSA
“withholds a single pool of 25% of past‐due benefits for direct payment of agency
and court fees.” Id. at 523. It will withhold that percentage of benefits until the
court decides any pending motion for attorney’s fees. See SSA, Program
Operations Manual System, GN 03930.091.
6
1968); Connor v. Gardner, 381 F.2d 497, 500 (4th Cir. 1967). We also
reach that conclusion.
The issue raised on this appeal is whether Fed. R. Civ. P. 54 can
sensibly be applied to § 406(b) attorney’s fee applications in such
circumstances. As indicated supra at note 3, Rule 54 requires a motion
for attorney’s fees to be made within fourteen days of “judgment,”
defined to include “any order from which an appeal lies.” Fed. R. Civ.
P. 54(a), (d)(2)(B)(i). A “sentence four” remand is a final and
appealable judgment. See Forney v. Apfel, 524 U.S. 266, 270–71 (1998)
(holding sentence four remand appealable by either party); accord
Mead v. Reliastar Life Ins. Co., 768 F.3d 102, 115 (2d Cir. 2014)
(observing that appealability of sentence four remand is exception to
“generally accepted rule that remand orders are interlocutory”). As
such, it is presumptively subject to the fourteen‐day filing limitation
of Rule 54(d)(2)(B). Cf. Shalala v. Schaefer, 509 U.S. 292, 296–97 (1993)
(holding sentence four remand is “judgment” triggering limitations
period for attorney’s fee motion under Equal Access to Justice Act, 28
U.S.C. § 2412). Nevertheless, a practical problem arises with filing a
motion within that time: the Commissioner typically does not
calculate the amount of past‐due benefits until months after the
district court remands, and § 406(b) caps attorney’s fees at 25% of the
benefits award. Thus, where a sentence four judgment orders
remand, Rule 54(d)(2)(B) may present “a deadline that cannot be met”
within fourteen days of that judgment. Walker v. Astrue, 593 F.3d at
280.
7
In addressing this dilemma, our sister circuits have not agreed
on a solution. The Tenth Circuit eschews the application of Rule 54
in this context. See McGraw v. Barnhart, 450 F.3d at 504. Instead, it
derives a “reasonableness” standard from language in Fed. R. Civ. P.
60 permitting a court to relieve a party from a “final judgment, order,
or proceeding” for “any [] reason that justifies relief” upon a motion
“made within a reasonable time.” Fed. R. Civ. P. 60(b)(6), (c)(1). The
Tenth Circuit explains that Rule 60’s “grand reservoir of equitable
power to do justice” provides the “best option” for addressing the
practicalities of sentence four judgments ordering remand and, thus,
it holds that a motion for attorney’s fees pursuant to § 406(b) is timely
if filed “within a reasonable time of the Commissioner’s decision
awarding benefits.” McGraw v. Barnhart, 450 F.3d at 504–05 (internal
quotation marks omitted).
By contrast, the Third Circuit concludes that Rule 54 applies to
§ 406(b) applications following sentence four remands. It observes
that there is “little support” in law for using Rule 60 to determine the
timeliness of such applications. Walker v. Astrue, 593 F.3d at 279.
Indeed, such reliance appears to “conflict[] in principle with Supreme
Court jurisprudence that instructs that a post‐judgment motion for
attorney fees is not properly asserted as a motion to amend or alter
judgment.” Id. (citing White v. N.H. Dep’t of Emp’t Sec., 455 U.S. 445,
451 (1982) (holding attorney’s fees request inappropriate under Fed.
R. Civ. P. 59(e))). Mindful nevertheless that a rigid application of Rule
54 to § 406(b) applications following sentence four remand judgments
can produce “injustice,” the Third Circuit avoids that concern by
8
tolling the rule’s filing deadline “until the notice of award is issued
by the Commissioner” on remand, “and counsel is notified of that
award.” Id. at 280. In short, once a successful claimant receives notice
of the Commissioner’s award on remand, he would have the fourteen
days afforded by Rule 54(d)(2)(B) to file a § 406(b) motion for
attorney’s fees. The Eleventh and Fifth Circuits had earlier reached
similar conclusions about the application of Rule 54 to § 406(b). See
Bergen v. Comm’r of Soc. Sec., 454 F.3d at 1277 & n.1; Pierce v. Barnhart,
440 F.3d at 663–64.
With due consideration to the views of our sister circuits, we
conclude, largely for the reasons stated by the Third Circuit, that Rule
54(d)(2)(B) provides the applicable limitations period for filing
§ 406(b) motions. The tolling of that rule, rather than the application
of Rule 60(b)(6), best resolves the practical concerns that can arise
when a district court judgment reverses a denial of social security
benefits and remands the case to the agency for further proceedings.
This comports with our own precedent, which recognizes that
“[s]tatutes of limitations are generally subject to equitable tolling
where necessary to prevent unfairness to a plaintiff who is not at fault
for her lateness in filing.” Gonzalez v. Hasty, 651 F.3d 318, 322 (2d Cir.
2011) (internal quotation marks omitted) (tolling statute of limitations
while plaintiff exhausts administrative remedies); see generally
Nutraceutical Corp. v. Lambert, 139 S. Ct. 710, 714 (2019) (recognizing
that time limitation in Federal Rule of Civil or Appellate Procedure
may be tolled when, as here, “pertinent rule or rules invoked” do not
show “clear intent to preclude tolling”). That principle sensibly
9
applies to Rule 54(d)(2)(B)’s limitations period because parties who
must await the Commissioner’s award of benefits on remand cannot
be expected to file an application for attorney’s fees that are statutorily
capped by the amount of an as‐yet‐unknown benefits award. Once
counsel receives notice of the benefits award—and, therefore, the
maximum attorney’s fees that may be claimed—there is no sound
reason not to apply Rule 54(2)(B)’s fourteen‐day limitations period to
a § 406(b) filing, just as it would apply to any other final or appealable
judgment.
In urging otherwise, Sinkler argues that “the Social Security
Administration’s own policies and procedures” make such a tolling
solution unworkable. Appellant Br. at 10. She observes that a
claimant has 60 days to appeal the Commissioner’s calculation of
past‐due benefits, which administrative appeal can result in an
adjustment of benefits. See 20 C.F.R. §§ 404.909, 416.1409. Sinkler
further asserts that, after issuing a notice of award, the agency may
still amend it downward to offset any Workers Compensation
benefits received by the claimant, or upward to provide benefits to a
claimant’s dependents. See Hopkins v. Cohen, 390 U.S. 530, 534–35
(1968) (discussing fees awarded based on benefits to claimants and
dependents).
The argument fails to persuade for several reasons. First,
Sinkler has not shown that the posited scenarios could not occur even
if a claimant were afforded a “reasonable” time after a benefits
determination on remand to file a § 406(b) fee application. Second,
Sinkler does not claim that, upon an agency adjustment of an initial
10
benefits award, a district court would not entertain a motion to adjust
attorney’s fees awarded on the basis of the original benefits
calculation. Certainly, the agency contemplates modifications to its
own attorney’s fee awards in those circumstances. See SSA, Program
Operations Manual System, GN 03940.035 (stating procedure for
adjusting attorney’s fee authorized by Commissioner following
award of auxiliary benefits); GN 03920.040 (same following
administrative decrease in benefits award); GN 03920.051 (stating
policy for recovering excess attorney’s fee payment). Further, in
January 2019, the District Court for the Western District of New York
amended its local rules specifically to advise parties that it would
entertain motions to adjust § 406(b) awards in light of changed
circumstances pursuant to Rule 60(b). See W.D.N.Y. Loc. R. 5.5(g)(1)
(“Should information come to the attention of either party after the
entry of an order approving fees under 42 U.S.C. § 406(b) suggesting
that the information used to calculate the appropriate fee was
incorrect or incomplete, a motion may be brought under Rule 60(b)(1),
(2), or (6) of the Federal Rules of Civil Procedure seeking a correction
of the fee approved.”). Thus, we are not persuaded that parties who
secure sentence four remand judgments in the district court will be
prejudiced by having to file § 406(b) motions for attorney’s fees within
the fourteen‐day period specified in Rule 54(d)(2)(B) as long as that
11
period is tolled until a benefits calculation is made on remand and
notice thereof received by the parties.5
Sinkler further argues that application of Rule 54(d)(2)(B)’s
fourteen‐day limitations period is at odds with the SSA’s own
regulation affording parties 60 days after a benefits award to request
approval of fees and direct payment from past‐due benefits. See 20
C.F.R. § 404.1730(c). It is not clear whether this regulation applies
only to fees for administrative representation under § 406(a), or also
to fees for court representation under § 406(b). Compare id.
§ 404.1730(a) (referencing “fee allowed by a Federal Court”), with id.
§ 404.1730(c)(2)(i) (referencing § 404.1725 regarding “fee for services .
. . performed in dealing with us,” i.e., SSA); see also id. § 404.1728(b)
(authorizing payment of fees awarded by federal court out of past‐
due benefits but providing no time period to request payment). No
matter. Even if the regulation’s 60‐day period is applied to § 406(b)
awards, as the SSA appears to do in practice, see SSA, Program
Operations Manual System, GN 03930.091, that would still only
indicate the time within which a party must request a direct payment
of such fees from the Commissioner, not the time within which to
request an award of fees from the district court, see generally Culbertson
v. Berryhill, 139 S. Ct. at 523 (differentiating between “past‐due
benefits that the agency can withhold for direct payment” and
“amount of fees that can be approved for representation before the
5 Nothing in this opinion departs from the law’s presumption that a party
receives communications three days after mailing. See Tiberio v. Allergy Asthma
Immunology of Rochester, 664 F.3d 35, 37 (2d Cir. 2011).
12
agency or the court”). It is the latter request that we today hold is
subject to the fourteen‐day filing limitation of Rule 54(d)(2)(B) once a
party receives notice of a benefits calculation following a sentence
four remand judgment.
In holding Rule 54 applicable in these circumstances, we are
mindful that its fourteen‐day limitations period is not absolute. The
rule expressly states that the specified period applies “[u]nless a
statute or a court order provides otherwise.” Fed. R. Civ. P.
54(d)(2)(B). Thus, district courts are empowered to enlarge that filing
period where circumstances warrant. See Walker v. Astrue, 593 F.3d at
280; Pierce v. Barnhart, 440 F.3d at 664; Bergen v. Comm’r of Soc. Sec., 454
F.3d at 1277 n.2. To be sure, courts cannot adopt local rules or orders
that are inconsistent with federal rules of procedure. See 28 U.S.C.
§ 2071; Fed. R. Civ. P. 83(a)(1) (requiring that “local rule must be
consistent with—but not duplicate—federal statutes and [rules of
federal court procedure]”).6 Nevertheless, where, as here, the rule
6 On this appeal, we do not consider the propriety of so much of the recently
adopted, earlier referenced Western District local rule that affords parties longer
than fourteen days from notice of a benefits calculation on remand to file § 406(b)
applications. See W.D.N.Y. Loc. R. 5.5(g)(1) (“Plaintiff’s counsel may file a petition
for attorney’s fees under 42 U.S.C. § 406(b) no later than sixty‐five (65) days after
the date of the final notice of award sent to plaintiff’s counsel of record at the
conclusion of defendant’s past‐due benefit calculation stating the amount
withheld for attorney’s fees.”). In the absence of any clear decision by this court,
the district court understandably sought to provide parties with a standard for
filing timely § 406(b) applications following a sentence four remand judgment.
Courts in other districts outside this circuit made similar efforts, although setting
different filing deadlines. See, e.g., D.S.C. Loc. R. 83.VII.07 (requiring § 406(b)
applications to be made within 60 days of notice of benefits calculation); E.D. &
13
itself affords courts the discretion to alter a specified filing time, we
will generally defer to a district court in deciding when such an
alteration is appropriate in a particular case as, for example, when a
party needs more time to assemble and file the administrative record.
Sinkler filed her § 406(b) application more than six months after
receiving notice of the Commissioner’s calculation of benefits on
remand. This was far outside the fourteen‐day period prescribed by
Rule 54(d)(2)(B), even when tolled as warranted following sentence
four remand judgments. Thus, the district court reasonably denied
the motion as untimely under that rule.
Sinkler Fails To Show that Her Six‐Month Filing Delay
Was Reasonable
Sinkler argues that, even if Rule 54(d)(2)(B)’s fourteen‐day
filing period is applied to future § 406(b) applications following
sentence four remand judgments, it should not apply to her case
because she had no notice of that limitation period’s application.
Sinkler insists that “[t]he practice of the various District Courts in this
Circuit was to consider whether the [§ 406(b)] motion was filed within
a reasonable time,” Appellant Br. at 16, and that courts routinely
W.D. Ky. Joint Loc. R. 83.11(D) (affording 30 days); D. Minn. Loc. R. 7.2(e)
(affording 30 days); D. Me. Loc. R. 54.2 (affording 30 days); D. Md. Loc. R. 109.2(c)
(affording 30 days); E.D. Mich. Loc. R. 54.2(a) (affording fourteen days); S.D.W.V.
Loc. R. Civ. P. 9.6 (requiring filing “promptly” after plaintiff receives notice of
amount of past‐due benefits). This decision, however, now clarifies the
application of Rule 54(d)(2)(B)’s fourteen‐day filing period in such circumstances.
This should make the need for such generally applicable local rules unnecessary
in this circuit.
14
found filings more than fourteen days after an SSA Notice of Award
“reasonable,” see id. at 16–19 (collecting cases).
Assuming we would entertain Sinkler’s notice argument, it
fails on the merits because she provides no factual basis to support a
claim that it was “reasonable” to delay the filing of her § 406(b)
application for more than six months after she received notice of the
benefits calculation on remand. Certainly, she offered no explanation
for this delay in the district court. See Sinkler v. Berryhill, 305 F. Supp.
3d at 459 (“Plaintiff’s counsel has failed to provide any explanation
justifying this significant delay.”); Sinkler v. Berryhill, 317 F. Supp. at
695 (same). Nor has she done so on appeal. Rather, her counsel
argues that “he did not, and still does not, need to present good cause
for the timeliness of his filing because the case law of this Circuit . . .
led him to believe that his motion was filed within a reasonable time.”
Reply Br. at 2. In fact, counsel cites to only one district court case in
this circuit that has entertained a § 406(b) motion filed more than six
months after a benefits calculation. He points to no precedent
indicating that unexplained delays of that length will always be
deemed reasonable.
In short, because Sinkler points to no facts that would allow her
(or her counsel) to think a six‐month filing delay in her case was
reasonable, she can hardly claim prejudice from any lack of notice that
Rule 54(d)(2)(B)’s fourteen day filing standard would determine the
timeliness of her § 406(b) filing.
15
Nor can Sinkler use 28 U.S.C. § 2071(b) to support her notice
complaint. As the district court correctly observed, the notice and
comment requirements of that statute apply to courts prescribing local
rules for the conduct of their business, not to courts interpreting rules
of law controlling their adjudication of claims. See Sinkler v. Beryhill,
317 F. Supp. 3d at 693.
Thus, on de novo review of the applicable law, we conclude that
Sinkler’s § 406(b) application was untimely under Rule 54(d)(2)(B),
which controls, but also under the reasonableness standard that
Sinkler urges. We, therefore, affirm the district court’s judgment
denying relief.
Conclusion
To summarize, we conclude as follows:
1. Fed. R. Civ. P. 54(d)(2)(B) provides the filing time for
attorney’s fee applications pursuant to 42 U.S.C. § 406(b).
2. The fourteen‐day filing period prescribed by Rule 54(d)(2)(B)
is subject to equitable tolling when § 406(b) motions must
await the SSA Commissioner’s calculation of benefits
following a district court’s sentence four remand judgment.
In that circumstance, the fourteen‐day filing period starts to
run when the claimant receives notice of the benefits
calculation.
3. The plaintiff here having waited more than six months after
receiving notice of the Commissioner’s benefits calculation
16
before filing her § 406(b) motion in the district court, the
district court acted within its discretion in denying the motion
as untimely.
4. Insofar as plaintiff claims that a lack of notice as to the
application of Rule 54 to § 406(b) motions warrants review of
her filing under a more lenient reasonableness standard, the
argument fails because the record is devoid of any facts
demonstrating that plaintiff’s sixth‐month filing delay was
reasonable.
Accordingly, the judgment is AFFIRMED in all respects.
17