1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 KELLY USANOVIC, No. 2:21-cv-1168-SCR 12 Plaintiff, 13 v. ORDER 14 COMMISSIONER OF SOCIAL SECURITY, 15 Defendant. 16 17 18 Plaintiff sought judicial review of a final decision of the Commissioner of Social Security 19 (“Commissioner”), denying her application for benefits under the Social Security Act. On 20 September 6, 2023, Magistrate Judge Deborah Barnes remanded this action to the Commissioner 21 for further proceedings. ECF No. 17. On remand, Plaintiff was awarded past benefits of 22 $113,451.95, plus ongoing benefits of $2,756 per month after July 2025. ECF No. 22-3 at 2. 23 Now pending before the court is Plaintiff’s Motion for an award of $28,000 in attorney’s 24 fees pursuant to 42 U.S.C. § 406(b). ECF No. 22. The Commissioner filed a statement that he 25 “neither supports nor opposes counsel’s request for attorney’s fees.” ECF No. 26 at 2. The 26 Commissioner requests that the order direct Plaintiff’s counsel to reimburse Plaintiff any fees 27 previously received under the Equal Access to Justice Act (EAJA). Id. at 2-3. For the reasons set 28 forth below, the Motion and the Commissioner’s request are granted. 1 I. REASONABLENESS OF FEE REQUEST 2 At the outset of the representation, Plaintiff and her counsel entered into a contingent-fee 3 agreement for 25% of past due benefits awarded. ECF No. 22-1. Pursuant to that agreement, 4 Plaintiff’s counsel now seeks attorney’s fees in the amount of $28,000, which represents less than 5 25% of the $113,451.95 in retroactive disability benefits awarded to Plaintiff on remand. ECF 6 No. 22 at 5; ECF No. 22-3. 7 Attorneys are entitled to fees for cases in which they have successfully represented social 8 security claimants: 9 Whenever a court renders a judgment favorable to a claimant under this subchapter who was represented before the court by an attorney, 10 the court may determine and allow as part of its judgment a reasonable fee for such representation, not in excess of 25 percent of 11 the total of the past-due benefits to which the claimant is entitled by reason of such judgment, and the Commissioner of Social Security 12 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. 13 14 42 U.S.C. § 406(b)(1)(A). “In contrast to fees awarded under fee-shifting provisions such as 42 15 U.S.C. § 1988, the fee is paid by the claimant out of the past-due benefits awarded; the losing 16 party is not responsible for payment.” Crawford v. Astrue, 586 F.3d 1142, 1147 (9th Cir. 2009) 17 (en banc) (citing Gisbrecht v. Barnhart, 535 U.S. 789, 802 (2002)). The goal of fee awards under 18 § 406(b) is “‘to protect claimants against “inordinately large fees” and also to ensure that 19 attorneys representing successful claimants would not risk “nonpayment of [appropriate] fees.”’” 20 Parrish v. Comm'r of Soc. Sec. Admin., 698 F.3d 1215, 1217 (9th Cir. 2012) (quoting Gisbrecht, 21 535 U.S. at 805). 22 The 25% statutory maximum fee is not an automatic entitlement, and the court must 23 ensure that the fee requested is reasonable. Gisbrecht, 535 U.S. at 808-09 (“406(b) does not 24 displace contingent-fee agreements within the statutory ceiling; instead, § 406(b) instructs courts 25 to review for reasonableness fees yielded by those agreements”). “Within the 25 percent 26 boundary… the attorney for the successful claimant must show that the fee sought is reasonable 27 for the services rendered.” Id. at 807. “[A] district court charged with determining a reasonable 28 fee award under § 406(b)(1)(A) must respect ‘the primacy of lawful attorney-client fee 1 arrangements,’ ‘looking first to the contingent-fee agreement, then testing it for reasonableness.’” 2 Crawford, 586 F.3d at 1149 (quoting Gisbrecht, 535 U.S. at 793, 808). 3 In determining whether the requested fee is reasonable, the court considers “‘the character 4 of the representation and the results achieved by the representative.’” Crawford, 586 F.3d 5 at 1151 (quoting Gisbrecht, 535 U.S. at 808). In determining whether a reduction in the fee is 6 warranted, the court considers whether the attorney provided “substandard representation or 7 delayed the case,” or obtained “benefits that are not in proportion to the time spent on the case.” 8 Id. Finally, the court considers the attorney’s record of hours worked and counsel’s regular 9 hourly billing charge for non-contingent cases. Crawford, 586 F.3d at 1151-52 (citing Gisbrecht, 10 535 U.S. at 808); see also, E.D. Cal. R. 293(c)(1) (in fixing attorney’s fees the court considers 11 “the time and labor required”). Below, the court will consider these factors in assessing whether 12 the fee requested by counsel in this case pursuant to 42 U.S.C. § 406(b) is reasonable. 13 Plaintiff’s counsel consists of one attorney with three years of experience as of the 14 commencement of this action, and five years as of the fee award under the EAJA, plus two 15 paralegals. ECF Nos. 22-4, 22-6. Counsel claims 13.08 hours of work by attorney Matthew 16 Holmberg, plus 4.9 hours of paralegal work, for a total of 17.98 hours. ECF Nos. 22 at 16, 22-4. 17 The Court finds that the amount of time expended on this matter is reasonable. There is no 18 indication that a reduction of fees is warranted due to any substandard performance by counsel. 19 There is also no evidence that Plaintiff’s counsel engaged in any dilatory conduct resulting in 20 excessive delay. 21 The Court finds that a $28,000 fee, which does not exceed 25% of the amount paid in 22 past-due benefits to Plaintiff, is not excessive in relation to the benefits awarded. In making this 23 determination, the Court recognizes the contingent fee nature of this case and counsel’s 24 assumption of the risk of going uncompensated in agreeing to represent Plaintiff on such terms. 25 See Crawford, 586 F.3d at 1152 (“[t]he attorneys assumed significant risk in accepting these 26 cases, including the risk that no benefits would be awarded or that there would be a long court or 27 administrative delay in resolving the cases”). At issue, however, is whether the requested fee 28 represents an excessive hourly rate. 1 In Crawford, the Ninth Circuit found the fee awards in the three consolidated cases to be 2 reasonable, with fee requests ranging from $11,500 to $24,000, and effective rates in the range of 3 $500 to $900/hour. 586 F.3d at 1145-1147. Here counsel acknowledges that dividing the 4 $28,000 fee by the 17.98 billed hours results in an effective hourly rate of $1,557.29/hour. ECF 5 No. 22 at 7. The effective rate appears somewhat higher than a sampling of recent rates approved 6 in this District, and therefore approaches what could be categorized as a windfall amount. See 7 Garcia v. O’Malley, 2024 WL 4121872 (E.D. Cal. September 9, 2024) (effective hourly rate of 8 $685); Guzman Paz v. Commissioner, 2024 WL 4029592 (E.D. Cal. September 3, 2024) 9 (effective hourly rate of $883); Garcia v. Commissioner, 2024 WL 3968083 (E.D. Cal. August 10 28, 2024) (effective hourly rate of $864). Counsel argues, however, that after applying annual 11 Cost-of-Living Adjustments to hourly rates approved in 2016 and 2017, the requested rate is 12 comparable. ECF No.
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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 KELLY USANOVIC, No. 2:21-cv-1168-SCR 12 Plaintiff, 13 v. ORDER 14 COMMISSIONER OF SOCIAL SECURITY, 15 Defendant. 16 17 18 Plaintiff sought judicial review of a final decision of the Commissioner of Social Security 19 (“Commissioner”), denying her application for benefits under the Social Security Act. On 20 September 6, 2023, Magistrate Judge Deborah Barnes remanded this action to the Commissioner 21 for further proceedings. ECF No. 17. On remand, Plaintiff was awarded past benefits of 22 $113,451.95, plus ongoing benefits of $2,756 per month after July 2025. ECF No. 22-3 at 2. 23 Now pending before the court is Plaintiff’s Motion for an award of $28,000 in attorney’s 24 fees pursuant to 42 U.S.C. § 406(b). ECF No. 22. The Commissioner filed a statement that he 25 “neither supports nor opposes counsel’s request for attorney’s fees.” ECF No. 26 at 2. The 26 Commissioner requests that the order direct Plaintiff’s counsel to reimburse Plaintiff any fees 27 previously received under the Equal Access to Justice Act (EAJA). Id. at 2-3. For the reasons set 28 forth below, the Motion and the Commissioner’s request are granted. 1 I. REASONABLENESS OF FEE REQUEST 2 At the outset of the representation, Plaintiff and her counsel entered into a contingent-fee 3 agreement for 25% of past due benefits awarded. ECF No. 22-1. Pursuant to that agreement, 4 Plaintiff’s counsel now seeks attorney’s fees in the amount of $28,000, which represents less than 5 25% of the $113,451.95 in retroactive disability benefits awarded to Plaintiff on remand. ECF 6 No. 22 at 5; ECF No. 22-3. 7 Attorneys are entitled to fees for cases in which they have successfully represented social 8 security claimants: 9 Whenever a court renders a judgment favorable to a claimant under this subchapter who was represented before the court by an attorney, 10 the court may determine and allow as part of its judgment a reasonable fee for such representation, not in excess of 25 percent of 11 the total of the past-due benefits to which the claimant is entitled by reason of such judgment, and the Commissioner of Social Security 12 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. 13 14 42 U.S.C. § 406(b)(1)(A). “In contrast to fees awarded under fee-shifting provisions such as 42 15 U.S.C. § 1988, the fee is paid by the claimant out of the past-due benefits awarded; the losing 16 party is not responsible for payment.” Crawford v. Astrue, 586 F.3d 1142, 1147 (9th Cir. 2009) 17 (en banc) (citing Gisbrecht v. Barnhart, 535 U.S. 789, 802 (2002)). The goal of fee awards under 18 § 406(b) is “‘to protect claimants against “inordinately large fees” and also to ensure that 19 attorneys representing successful claimants would not risk “nonpayment of [appropriate] fees.”’” 20 Parrish v. Comm'r of Soc. Sec. Admin., 698 F.3d 1215, 1217 (9th Cir. 2012) (quoting Gisbrecht, 21 535 U.S. at 805). 22 The 25% statutory maximum fee is not an automatic entitlement, and the court must 23 ensure that the fee requested is reasonable. Gisbrecht, 535 U.S. at 808-09 (“406(b) does not 24 displace contingent-fee agreements within the statutory ceiling; instead, § 406(b) instructs courts 25 to review for reasonableness fees yielded by those agreements”). “Within the 25 percent 26 boundary… the attorney for the successful claimant must show that the fee sought is reasonable 27 for the services rendered.” Id. at 807. “[A] district court charged with determining a reasonable 28 fee award under § 406(b)(1)(A) must respect ‘the primacy of lawful attorney-client fee 1 arrangements,’ ‘looking first to the contingent-fee agreement, then testing it for reasonableness.’” 2 Crawford, 586 F.3d at 1149 (quoting Gisbrecht, 535 U.S. at 793, 808). 3 In determining whether the requested fee is reasonable, the court considers “‘the character 4 of the representation and the results achieved by the representative.’” Crawford, 586 F.3d 5 at 1151 (quoting Gisbrecht, 535 U.S. at 808). In determining whether a reduction in the fee is 6 warranted, the court considers whether the attorney provided “substandard representation or 7 delayed the case,” or obtained “benefits that are not in proportion to the time spent on the case.” 8 Id. Finally, the court considers the attorney’s record of hours worked and counsel’s regular 9 hourly billing charge for non-contingent cases. Crawford, 586 F.3d at 1151-52 (citing Gisbrecht, 10 535 U.S. at 808); see also, E.D. Cal. R. 293(c)(1) (in fixing attorney’s fees the court considers 11 “the time and labor required”). Below, the court will consider these factors in assessing whether 12 the fee requested by counsel in this case pursuant to 42 U.S.C. § 406(b) is reasonable. 13 Plaintiff’s counsel consists of one attorney with three years of experience as of the 14 commencement of this action, and five years as of the fee award under the EAJA, plus two 15 paralegals. ECF Nos. 22-4, 22-6. Counsel claims 13.08 hours of work by attorney Matthew 16 Holmberg, plus 4.9 hours of paralegal work, for a total of 17.98 hours. ECF Nos. 22 at 16, 22-4. 17 The Court finds that the amount of time expended on this matter is reasonable. There is no 18 indication that a reduction of fees is warranted due to any substandard performance by counsel. 19 There is also no evidence that Plaintiff’s counsel engaged in any dilatory conduct resulting in 20 excessive delay. 21 The Court finds that a $28,000 fee, which does not exceed 25% of the amount paid in 22 past-due benefits to Plaintiff, is not excessive in relation to the benefits awarded. In making this 23 determination, the Court recognizes the contingent fee nature of this case and counsel’s 24 assumption of the risk of going uncompensated in agreeing to represent Plaintiff on such terms. 25 See Crawford, 586 F.3d at 1152 (“[t]he attorneys assumed significant risk in accepting these 26 cases, including the risk that no benefits would be awarded or that there would be a long court or 27 administrative delay in resolving the cases”). At issue, however, is whether the requested fee 28 represents an excessive hourly rate. 1 In Crawford, the Ninth Circuit found the fee awards in the three consolidated cases to be 2 reasonable, with fee requests ranging from $11,500 to $24,000, and effective rates in the range of 3 $500 to $900/hour. 586 F.3d at 1145-1147. Here counsel acknowledges that dividing the 4 $28,000 fee by the 17.98 billed hours results in an effective hourly rate of $1,557.29/hour. ECF 5 No. 22 at 7. The effective rate appears somewhat higher than a sampling of recent rates approved 6 in this District, and therefore approaches what could be categorized as a windfall amount. See 7 Garcia v. O’Malley, 2024 WL 4121872 (E.D. Cal. September 9, 2024) (effective hourly rate of 8 $685); Guzman Paz v. Commissioner, 2024 WL 4029592 (E.D. Cal. September 3, 2024) 9 (effective hourly rate of $883); Garcia v. Commissioner, 2024 WL 3968083 (E.D. Cal. August 10 28, 2024) (effective hourly rate of $864). Counsel argues, however, that after applying annual 11 Cost-of-Living Adjustments to hourly rates approved in 2016 and 2017, the requested rate is 12 comparable. ECF No. 22 at 9-10 (citing Palos v. Colvin, 2016 WL 5110243 at *2 (C.D. Cal. 13 2016); White v. Berryhill, 2017 WL 11634804 at *3 (C.D. Cal. July 7, 2017)). In any case, courts 14 have also approved higher effective rates. See Roxsann D. A. v. O’Malley, 2024 WL 1136398 15 (C.D. Cal. Feb. 12, 2024) (“The Central District of California has frequently found reasonable 16 fees with effective hourly rates exceeding $1,000”); Timothy M. v. Commissioner, 2023 WL 17 1071604 (D. Oregon Jan. 27, 2023) (effective rate of $1,863); Tristan v. Commissioner, 2023 WL 18 6129832 (E.D. Cal. Sept. 19, 2023) (effective rate of $1,580). 19 The Court also notes that the effective rate is significantly higher than what objective 20 standards otherwise suggest. For example, the 2025 Laffey Matrix defines a reasonable hourly 21 fee as no more than $258 for a paralegal and $1,141 for an attorney with over 20 years of 22 experience. ECF No. 22 at 8, 17-18; ECF No. 22-7 at 46. Holmberg, in contrast, received his 23 J.D. in May 2017 and started working as an associate attorney in June 2018. ECF No. 22 at 17; 24 ECF No. 22-6. He therefore graduated from law school less than seven years before the EAJA 25 award in 2023. See ECF Nos. 21, 22-4. The reasonable hourly fee under the Laffey Matrix for 26 such an attorney at the time was $538, while the reasonable hourly rate for a paralegal was $258. 27 ECF No. 22-7 at 46. Using the Laffey Matrix to conduct a lodestar analysis yields a reasonable 28 fee of ($538 x 13.08) = $7,037.04 for work Holmberg performed, plus ($258 x 4.9) = $1,264.20 1 for work the paralegals performed, for a total of $8,301.24. See ECF No. 22-24. 2 As counsel notes, however, Gisbrecht and Crawford reject using a lodestar analysis to 3 determine what fees should be paid. ECF No. 22 at 6; Crawford, 586 F.3d at 1148 (citing 4 Gisbrecht, 535 U.S. at 808–09). Nor do any of the three factors discussed in Crawford – 5 substandard performance, dilatory conduct, and proportion of fees to the benefits achieved – merit 6 reduction in the current case. See 586 F.3d at 1152. The Court is concerned that granting the 7 requested fee award would be tantamount to finding that any fee is reasonable if less than 25% of 8 awarded benefits, an approach the Supreme Court has rejected. See Gisbrecht, 535 U.S. at 808- 9 09. Yet the facts before the Court, and the effective ban on using lodestar analysis dictated by 10 precedent, provide no basis for reducing the requested fee award. For the reasons stated above, 11 the Court concludes that the fees sought by counsel pursuant to § 406(b) are reasonable. 12 II. OFFSET FOR EAJA FEES 13 An award of § 406(b) fees must be offset by any prior award of attorney’s fees granted 14 under the EAJA. 28 U.S.C. § 2412; Gisbrecht, 535 U.S. at 796. Here, Plaintiff’s attorney was 15 previously awarded $3,700.00 in EAJA fees pursuant to parties’ stipulation. See ECF Nos. 20-21. 16 Counsel therefore must remit that amount to Plaintiff. 17 III. CONCLUSION 18 Accordingly, IT IS HEREBY ORDERED that: 19 1. Plaintiff’s Motion for attorney fees under 42 U.S.C. § 406(b) (ECF No. 22), is 20 GRANTED; 21 2. Counsel for Plaintiff is awarded $28,000 in attorney’s fees under § 406(b); the 22 Commissioner shall certify that amount to be paid to counsel from the funds previously withheld 23 for the payment of such fees; and 24 //// 25 //// 26 //// 27 //// 28 //// 1 3. Counsel for Plaintiff is directed to remit to Plaintiff the amount of $3,700 for EAJA 2 || fees previously paid to counsel by the Commissioner. 3 SO ORDERED. 4 || DATE: December 1, 2025 SEAN C. RIORDAN 7 UNITED STATES MAGISTRATE JUDGE 8 9 10 1] 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28