Chisholm v. Commissioner of Social Security Administration

Opinion

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA

9 Jason Chisholm, No. CV-19-08010-PCT-JAT

10 Plaintiff, ORDER

11 v.

12 Commissioner of Social Security Administration, 13 Defendant. 14 15 Pending before the Court is Plaintiff’s Attorney’s First Amended Motion for 16 Attorney Fees Under 42 U.S.C. § 406(b). (Doc. 21). The government filed a response 17 offering an analysis to assist this Court. (Doc. 23). Plaintiff’s counsel replied. (Doc. 24). 18 After this Court ordered supplemental briefing on April 4, 2022, (Doc. 25), both parties 19 filed supplemental responses (Docs. 28, 29). The Court now rules. 20 I. BACKGROUND 21 Following denials at the administrative level, Plaintiff filed this action seeking 22 judicial review of the Commissioner’s decision. (Doc. 1). After the parties submitted 23 briefing (Docs. 13, 14, 15), the Court entered an order reversing the ALJ’s decision and 24 remanding this matter for further administrative proceedings and the Clerk of the Court 25 entered judgment in this case (Docs. 16, 17). On remand, the ALJ issued a fully favorable 26 disability decision, finding Plaintiff disabled as of April 22, 2014. (See Doc. 21 at 2). 27 Thereafter, the Commissioner issued a Notice of Award in the amount of $181,254.00 for 28 past-due benefits and indicated that $36,218.50 has been withheld for payment of 1 attorney’s fees. (Doc. 21-1 at 2).1 2 Plaintiff’s counsel seeks a total fee award of $45,313.50, equal to 25% of Plaintiff’s 3 back pay, but is requesting that Defendant “subtract the amount actually paid as [Equal 4 Access to Justice Act (EAJA)] fees, which totals $6,600,” and send the remaining balance, 5 or $38,713.50, to Plaintiff’s counsel. (Doc. 21 at 13). For the following reasons the Court 6 will grant the Plaintiff’s motion requesting fees in the amount of $45,313.50 but deny 7 Plaintiff’s request for an EAJA fee offset. 8 II. APPLICABLE LAW AND ANALYSIS 9 A court entering judgment in favor of a social security claimant represented by 10 counsel “may determine and allow as part of its judgment a reasonable fee for such 11 representation, not in excess of 25 percent of the total of the past-due benefits to which the 12 claimant is entitled by reason of such judgment.” 42 U.S.C. § 406(b)(1)(A) (emphasis 13 added). Although “[t]he statute does not specify how courts should determine whether a 14 requested fee is reasonable,” Crawford v. Astrue, 586 F.3d 1142, 1148 (9th Cir. 2009), the 15 Supreme Court has made clear that the first step is to respect “the primacy of lawful 16 attorney-client fee agreements,” Gisbrecht v. Barnhart, 535 U.S. 789, 793 (2002). A court 17 may take a downward departure from a requested fee award “if the attorney provided 18 substandard representation or delayed the case, or if the requested fee would result in a 19 windfall.” Crawford, 586 F.3d at 1151. A court can also “consider the lodestar calculation, 20 but only as an aid in assessing the reasonableness of the fee.” Id. (citing Gisbrecht, 535 21 U.S. at 808). “Because the SSA has no direct interest” in how the award is apportioned 22 between client and counsel, district courts must independently “assure that the 23 reasonableness of the fee is established.” Id. at 1149. 24 In determining whether fees sought under § 406(b) are reasonable, the Court 25 considers the contingent-fee agreement, the character of the attorney’s representation, and 26 the result achieved. Gisbrecht, 535 U.S. at 808. Courts may also consider the number of 27 hours spent representing the claimant and the lawyer’s normal hourly billing rate for non-

28 1 As the government conceded in its supplemental brief, the government incorrectly withheld less than 25 percent of the total fee award. (Doc. 28 at 2). 1 contingent-fee cases, but this information does not control the reasonableness 2 determination. Id. at 808–09. Finally, if a claimant’s attorney receives fees under both the 3 EAJA and § 406(b), the attorney must “refund to the claimant the amount of the smaller 4 fee.” Id. at 796 (citation omitted). 5 Applying the Gisbrecht factors, the fee requested is reasonable here. Plaintiff 6 contracted to pay 25 percent of past-due benefits on a contingent fee basis for work 7 performed by Plaintiff’s counsel in this action. (Doc. 21-3 at 1). Plaintiff’s counsel seeks 8 $45,313.50, or 25% of the past-due amount awarded to Plaintiff. Counsel’s itemization of 9 services indicates 46.85 hours of services rendered. (Doc. 21-2 at 3). Based on the hours 10 expended and given the offset from the EAJA fee award that will be refunded to Plaintiff, 11 counsel’s effective hourly rate for this work is $826.33, amounting to a 21.4% contingency 12 fee. This amount is in line with effective hourly rates previously approved by the Ninth 13 Circuit. See Young v. Colvin, No. CV–11–538–PHX–SMM, 2014 WL 590335, at *1 (D. 14 Ariz. Feb. 14, 2014) (citing Crawford, 586 F.3d at 1153). 15 On the instant record, there is no indication of any substandard performance by 16 Plaintiff’s counsel. Counsel successfully convinced this Court that the ALJ’s disability 17 determination was in error. There is also no indication of substandard performance or 18 undue delay in prosecuting Plaintiff’s case. Crawford, 586 F.3d at 1151. Moreover, 19 Plaintiff’s counsel avers that he expended effort attempting to procure a notice of award in 20 this case after the government failed to timely provide it, and when it was finally issued, 21 Plaintiff’s counsel had to analyze the government’s erroneous calculations within. (Doc. 22 24 at 1). Thus, upon consideration of the Gisbrecht reasonableness factors, in addition to 23 the risk involved in the contingency fee arrangement in this case, the Court concludes that 24 a fee award of $45,313.50 is reasonable. 25 The Court notes that Plaintiff’s counsel requests the Court to allow him to offset the 26 $6,600 awarded under the EAJA against the allowed fees here, resulting in a net attorney’s 27 fees award of $38,713.50. (Doc. 21 at 13). The government opposes this request for a net 28 award as “not permissible under § 406(b),” but makes no arguments regarding the 1 || reasonableness of the requested fees otherwise. (Doc. 23 at 4). In reply, Plaintiff cites to || no precedent authorizing this Court to award Plaintiff’s counsel a net attorney’s fee award || but asserts that there is no authority forbidding such a net award.” (Doc. 24 at 1). 4 The Court agrees with the government that such an offset is not permissible under 5 || Gisbrecht, which requires: “the claimant’s attorney must refund to the claimant the amount 6|| of the smaller fee.” Gisbrecht, 535 U.S. at 796 (quotations omitted). Here, the EAJA award || is the smaller fee, so it must be refunded back to Plaintiff upon Plaintiff's counsel’s receipt 8 || of the attorney’s fees awarded by this Order. 9 II. CONCLUSION 10 Therefore, 11 IT IS ORDERED that Plaintiff's Attorney’s First Amended Motion for an Award || of Attorney Fees Under 42 U.S.C. § 406(b) (Doc. 21) is GRANTED in the amount of 13 || $45,313,50. 14 IT IS FURTHER ORDERED that Plaintiffs counsel shall, after receipt of the 15 || above-awarded fee, refund to Plaintiff the fee previously awarded under the Equal Access to Justice Act, in the amount of $6,600.00. 17 Dated this 18th day of May, 2022. 18 A 19 James A. Teilborg 20 Senior United States District Judge 21 22 23 24 25 26 27 > Although the government appears to make additional arguments related to the fee offset 28 || in its supplemental brief, the Court did not ask for supplemental briefing on this issue and has not considered these arguments in making its decision.

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