Makely v. Kijakazi

• Court: District Court, S.D. California
• Decided: October 21, 2024
• Docket: 3:22-cv-01969
• Status: Unknown

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 KELLY KAY M., Case No.: 22-cv-01969-DDL

12 Plaintiff, ORDER GRANTING UNOPPOSED 13 v. MOTION FOR ATTORNEY FEES

14 MARTIN O’MALLEY, Commissioner of

Social Security Administration1, 15 [Dkt. No. 18] Defendant. 16

17 Before the Court is a Motion for Attorney Fees Pursuant to 42 U.S.C. § 406(b), in 18 which Plaintiff’s counsel requests an award of fees for representing Plaintiff in connection 19 with her application for Social Security disability benefits (the “Motion”). Dkt. No. 18. 20 The Motion is unopposed.2 Pursuant to Civil Local Rule 7.1.d.1, the Court finds the 21 Motion suitable for disposition without argument. For the reasons stated herein, the Court 22 23

24 25 1 Commissioner O’Malley is automatically substituted pursuant to Federal Rule of Civil Procedure 25(d). 26 2 Plaintiff was given the opportunity to oppose the Motion but did not do so. 27 See Dkt. No. 20; see also Dkt. No. 22-1 (Plaintiff writes “Yes, I approve” in an email regarding the motion for attorney fees filed by counsel). On July 30, 2024, Defendant 28 1 GRANTS the Motion and ORDERS that counsel’s fees be paid from Plaintiff’s benefit 2 award consistent with the terms of this Order. 3 I. BACKGROUND 4 Plaintiff filed an application for Social Security Disability Insurance benefits and 5 Supplemental Security income benefits on January 9, 2020. See Dkt. No. 1. Plaintiff’s 6 claim was denied through the highest level of administrative review, and on December 13, 7 2022, Plaintiff appealed that denial. See id. On March 6, 2023, the parties filed a Joint 8 Motion for Voluntary Remand [Dkt. No. 11] pursuant to sentence four of Section 205(g) 9 of the Social Security Act, 42 U.S.C. § 405(g). On March 7, 2023, the Court issued an 10 Order reversing the final decision of the Commissioner and remanding the case for 11 reevaluation. Dkt. No. 12. On March 20, 2023, pursuant to this Court’s March 7 Order, 12 the Clerk of Court entered a final judgment in favor of Plaintiff. Dkt. No. 13. The 13 Commissioner granted Plaintiff’s application for benefits, entitling her to receive 14 $84,412.72 in past due benefits. Dkt. No. 18 at 5. 15 Throughout these proceedings, Plaintiff has been represented by the Law Offices of 16 Lawrence D. Rohlfing Inc., CPC.3 On October 21, 2021, Plaintiff signed a “Social Security 17 Representation Agreement” with counsel, agreeing that “[t]he fee for successful 18 prosecution of this matter is 25% of the past due benefits awarded upon reversal of any 19 unfavorable ALJ decision for work before the Social Security Administration.” 20 Dkt. No. 18-1. 21 Counsel now moves the Court for approval of an award of attorneys’ fees in the 22 amount of $15,000, offset by any amounts received pursuant to the Equal Access to Justice 23 24 25 26 27 3 References to “counsel” herein include the Law Offices of Lawrence D. Rohlfing Inc., 28 1 Act (the “EAJA”). Dkt. No. 18 at 1. The requested fees represent about 18 percent of 2 Plaintiff’s past-due benefits. See id. at 7. 3 II. LEGAL STANDARDS 4 An attorney who obtains a favorable result for a Social Security claimant is entitled 5 to compensation for such representation from any benefits recovered. 42 U.S.C. § 406(b) 6 (“Section 406(b)”). Counsel moves for payment of fees pursuant to Section 406(b), which 7 provides: 8 Whenever a court renders a judgment favorable to a claimant under this 9 subchapter who was represented before the court by an attorney, the court may 10 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 11 to which the claimant is entitled by reason of such judgment, and the 12 Commissioner of Social Security may, notwithstanding the provisions of section 405(i) of this title, certify the amount of such fee for payment to such 13 attorney out of, and not in addition to, the amount of such past-due benefits. 14 42 U.S.C. § 406(b)(1)(A). 15 In assessing attorneys’ fees in the Social Security context, both the Supreme Court 16 and the Ninth Circuit have signaled a preference for reasonableness considerations over 17 forced lodestar calculations. See Gisbrecht v. Barnhart, 535 U.S. 789, 808-09 (2002); 18 Crawford v. Astrue, 586 F.3d 1142, 1151 (9th Cir. 2009).5 In Gisbrecht, the district court 19 disregarded the plaintiffs’ contingency-fee agreements with their clients and instead 20 calculated counsel’s “reasonable fee” by using the lodestar method, resulting in 21 significantly lower fees, and the Ninth Circuit affirmed.6 535 U.S. at 797-98. The 22 23 24 4 Counsel specifically moves the Court to order (1) payment of the fee of $15,000 and (2) 25 that counsel reimburse plaintiff in the amount of $1,635.00 for EAJA fees previously received. Dkt. No. 18 at 1. 26 5 Unless otherwise noted, internal quotation marks, ellipses, brackets, citations, and 27 footnotes are omitted from citations. 6 The lodestar method calculates the attorney’s fee by multiplying the hours reasonably 28 1 Gisbrecht court reversed. Id. at 809. Noting that contingent-fee agreements are nearly 2 ubiquitous in the Social Security context, the Supreme Court held that the 25 percent cap 3 on fee awards under Section 406(b) was not meant to render such agreements 4 unenforceable, but to protect claimants from “inordinately large fees.” Id. at 800, 805. So 5 long as the agreed-upon fee did not exceed the statutory maximum, the Supreme Court 6 reasoned, the parties’ agreement should be honored. See id. at 793. 7 The Ninth Circuit has since reiterated that under Gisbrecht, “[contingency fee] 8 agreements [are] the primary means for determining [counsel’s] fee.” Crawford, 586 F.3d 9 at 1148-49 (noting that “the Supreme Court flatly rejected [the] lodestar approach”). The 10 Crawford court further explained why the lodestar method is disfavored, observing that it 11 “under-compensates attorneys for the risk they assume in representing [a Social Security 12 Disability benefits] claimant,” thereby discouraging qualified counsel from accepting 13 disability benefits cases and decreasing the availability of counsel for claimants who 14 require representation for recovery. Id. at 1149; see also Sproul v. Astrue, No. 11-CV- 15 1000-IEG (DHB), 2013 WL 394056, at *2-3 (S.D. Cal. January 30, 2013) (“An attorney 16 that can collect only a lodestar amount when he wins a Social Security benefits case and 17 absolutely nothing when he loses a benefits case is an attorney likely to forego representing 18 Social Security claimants altogether.”). 19 The Gisbrecht and Crawford courts declined to enumerate a precedential list of 20 factors for judges to consider for fee awards, instead stating that the Court should consider 21 “the character of the representation and the results the representative achieved.” Crawford, 22 586 F.3d at 1151 (citing Gisbrecht, 535 U.S. at 808). Although the Court should respect 23 the “primacy of attorney-client fee agreements,” counsel’s fee may be reduced on a 24 showing of delay, excessive billing, or other indicia of unreasonableness. Gisbrecht, 25 535 U.S. at 793, 808. 26 /// 27 /// 28 /// 1 III. DISCUSSION 2 A. Evaluation of Counsel’s Fee Request 3 With the foregoing considerations in mind, the Court turns to the fee request 4 presently before the Court. To reiterate, Plaintiff’s past due benefits are $84,412.72; of 5 that amount, counsel requests a fee of $15,000, or approximately 18 percent.7 6 See Dkt. No. 18 at 7. This amount is less than the statutory maximum; it also less than the 7 25 percent fee Plaintiff agreed to when she retained counsel.8 See 42 U.S.C. 8 § 406(b)(1)(A); see also Dkt. No. 18-1 (retainer agreement). Counsel argues that this 9 amount is reasonable “[c]onsidering the nature of the representation and the results 10 achieved, and . . . the time expended, consideration of hourly rates, market treatment of 11 contingency, and the relative dearth of qualified counsel for court review of agency 12 determinations . . ..” Dkt. No. 18 at 5. The Court agrees. 13 1. Nature of Representation and Result Achieved 14 As an initial matter, under Gisbrecht, the Court should give effect to the parties’ 15 agreement unless the record reveals a basis for doing otherwise. 535 U.S. at 807. Here, 16 the Administration ultimately deemed Plaintiff disabled, entitling her to over $84,000 in 17 past-due benefits – a favorable result. As to the nature of the representation, the Court 18 observes that counsel has represented Plaintiff on a contingency basis. During the nearly 19 three years between counsel’s engagement and Plaintiff’s entitlement to disability benefits, 20 counsel has not been paid. See Thomas v. Colvin, No. 1:11CV01291, 2015 WL 1529331, 21 at *3 (E.D. Cal. Apr. 3, 2015) (noting the “contingent-fee nature of this case and counsel’s 22 assumption of risk in agreeing to represent Plaintiff under such terms” supported a request 23 24 25 7 Counsel will also seek an administrative fee for representing Plaintiff in administrative 26 proceedings but represents that the “aggregate of all fees received by counsel … will not exceed the withholding in this case.” Dkt. No. 18 at 10. 27

8 Twenty-five percent of Plaintiff’s retroactive benefits is $21,103.18. See Dkt. No. 18 at 28 1 for 25 percent of benefits, and awarding the same). The Court finds these factors weigh in 2 favor of the requested fee award. 3 2. Whether Counsel’s Requested Fee Is Excessive 4 The Court has also considered whether counsel’s fee is excessive in comparison to 5 the work performed or to prevailing market rates. In this regard, the Court has reviewed 6 the billing records submitted in support of the requested fees. See generally Dkt. No. 16. 7 Although the Court’s reasonableness determination is not – and should not be – premised 8 on a simple hourly rate calculation, an assessment of counsel’s effective hourly rate for the 9 work performed nevertheless provides a useful guide as to whether the requested fee is 10 excessive or represents a windfall in comparison to the work performed. Counsel’s billing 11 records demonstrate that counsel expended 5.2 attorney hours and 2.6 paralegal hours on 12 the instant litigation, for a total of 7.8 hours. See Dkt. No. 33. Dividing the requested fees 13 by the number of hours expended yields an effective hourly rate of $1,923.07. 14 This rate is within the range, albeit on the higher end, of hourly rates approved by 15 other courts in the Ninth Circuit. See Brazile v. Comm’r of Soc. Sec., No. C18-5914JLR, 16 2022 WL 503779, at *2-4 (W.D. Wash. Feb. 18, 2022) (hourly rate of $2,000); Steven M. v. 17 Comm’r, Soc. Sec. Admin., No. 3:18-CV-00459-HZ, 2020 WL 249990, at *2 (D. Or. 2023) 18 (hourly rate of $1,900); Timothy M. v. Comm’r, Soc. Sec. Admin., No. 6:21-CV-01708-AR, 19 2023 WL 1071604, at *2 (D. Or. Jan. 27, 2023) (hourly rate of $1,863.01); 20 White v. Berryhill, No. CV 04-00331-AS, 2017 WL 11634804, at *3 (C.D. Cal. July 7, 21 2017) (hourly rate of $1,612). The Court thus finds this factor weighs in favor of the 22 requested fee award. 23 3. Policy Considerations 24 The Court has also considered the public interest in incentivizing qualified attorneys 25 to represent disability claimants. As the court in Crawford recognized, attorneys for 26 claimants “assume significant risk in accepting these cases, including the risk that no 27 benefits would be awarded or that there would be a long court or administrative delay in 28 resolving the cases.” 586 F.3d at 1152. Even if successful, counsel may have to “wait[] a 1 long, long time for payment.” Id. Giving effect to the parties’ negotiated fee agreement 2 compensates the attorneys not only for the time expended but also for the risks assumed, 3 and ensures their willingness to undertake those risks again in future cases. See id.; accord 4 Streeter v. Kijakazi, No. 1:18-cv-01276-SKO, 2021 WL 4065545, at *2 (E.D. Cal. 5 Sept. 7, 2021) (“The goal of fee awards in this context is to provide adequate incentive to 6 represent claimants” while protecting claimants from “depletion” of the benefits 7 recovered). The Court finds this factor also weighs in favor of granting counsel’s fee 8 request. 9 4. Whether Any Reduction in the Amount of Fees Requested Is Necessary 10 Finally, the Court has also evaluated whether any other circumstances warrant a 11 reduction in the requested fees. The Administration’s ultimate determination that Plaintiff 12 is entitled to disability benefits demonstrates that the case was meritorious, and the record 13 does not reveal any inordinate delay caused by counsel, work that was substandard, 14 unnecessary, or duplicative, or other indications that counsel’s fee is excessive. 15 5. Conclusion Regarding Reasonableness of Counsel’s Fee 16 In summary, as a result of counsel’s efforts, Plaintiff received a favorable decision 17 and an award of past-due benefits of over $84,000. Counsel’s requested fees are less than 18 both the 25 percent statutory maximum and the amount that Plaintiff agreed in advance to 19 pay for a successful outcome. The Court has found no evidence of delay or other factors 20 that would necessitate reducing the requested fees. Accordingly, the Court finds that 21 counsel’s request for attorneys’ fees request is reasonable, and GRANTS the Motion. 22 B. Counsel Must Refund Plaintiff Any Fees Received Pursuant to the EAJA 23 The EAJA also permits an attorney to receive fees for successful Social Security 24 representations.9 See Parrish v. Comm’r of Soc. Sec. Admin., 698 F.3d 1215, 1216-17 25 26 27 9 Pursuant to the EAJA: 28 1 Cir. 2012). However, unlike fees recovered pursuant to Section 406(b), which are 2 by the claimant, EAJA fees are paid by the government. /d. at 1218. While “[flee 3 awards may be made under both prescriptions, . . . the claimant’s attorney must refund to 4 ||the claimant the amount of the smaller fee.” Gisbrecht, 535 U.S. at 796 (quoting Pub. L. 5 || No. 99-80, § 3, 99 Stat. 183 (1985)). Accordingly, counsel must refund Plaintiff for any 6 ||EAJA fees that counsel has received for work before the Court.'° 7 ORDER 8 Based on the foregoing, the Court GRANTS counsel’s motion for attorneys’ fees 9 || pursuant to 42 U.S.C. § 406(b) [Dkt. No. 18] and APPROVES an award in the amount of 10 |}$15,000.00 to the Law Offices of Lawrence D. Rohlfing Inc., CPC. The Court further 11 |} ORDERS Plaintiff's counsel to refund Plaintiff $1,635.00 in EAJA fees that counsel 12 || previously received. 13 |} IT ISSO ORDERED. 14 || Dated: October 21, 2024 aie 15 Tbe! hho 16 Hon.DavidD.Leshner SS 17 United States Magistrate Judge 18 19 20 21 — | 23 [A] court shall award to a prevailing party other than the United States fees 74 and other expenses . . . incurred by that party in any civil action (other than cases sounding in tort), including proceedings for judicial review of agency 25 action, brought by or against the United States in any court having jurisdiction 26 of that action, unless the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust. See 28 U.S.C. § 2412 (d)(1)(A).