1 UNITED STATES DISTRICT COURT 2 NORTHERN DISTRICT OF CALIFORNIA 3 4
CASE NO. 23-cv-03198-SVK 6 Plaintiff,
7 [PROPOSED] ORDER GRANTING v. PLAINTIFF’s MOTION FOR APPROVAL Acting Commissioner of Social Security, 9
10 Defendant 11 12 After Plaintiff Joseph Mirto brought this action for review of the Commissioner of Social 13 Security’s decision to deny benefits, the Court remanded the case, and the Commissioner issued a 14 favorable decision. His attorney, Katherine Siegfried, now seeks $9,621.42 in attorney fees under 15 section 206(b) of the Social Security Act, 42 U.S.C. § 406(b), as incorporated into the Supplemental 16 17 Security Income program through 42 U.S.C. §1383(d). ECF No. 24. ECF No. 36. For the following 18 reasons, the Court GRANTS the motion. 19 21 After Mr. Mirto applied for disability benefits, his application was denied initially, at 22 reconsideration, after an initial administrative hearing, and at the Appeals Council. (AR 1). This action 23 24 for judicial review was then filed pursuant to 42 U.S.C. §§ 405(g) on Mr. Mirto’s behalf. ECF No. 1. 25 This Court found in Mr. Mirto’s favor and issued an order remanding for further proceedings. ECF No. 26 24. The Court subsequently granted the parties’ stipulation for attorney fees under the Equal Access to 27 Justice Act (“EAJA”), 28 U.S.C. Sec. 2412, in the amount of $8,500. ECF No. 23. 28 On remand, the Commissioner granted Plaintiff’s application and awarded SSI payments and nearly 1 pay counsel up to 25% of any past-due benefits resulting from a favorable disability decision. ECF No. 2 24, Ex. 4. 3 In the Notice of Award, Plaintiff was informed that 25% of the past-due SSI payments amounted to 4 $9,621.42 and that this amount was set aside to pay his attorney fees. ECF No. 24, Ex. 3. 5 6 II. LEGAL STANDARD 7
8 Attorneys handling Social Security proceedings may seek fees for their work under both the 9 EAJA and the Social Security Act. While the government pays an award pursuant to the EAJA, an 10 award pursuant to 406 of the Social Security Act is paid out of a successful claimant’s past-due benefits. 11 See 42 U.S.C. § 406(b)(1)(A); Russell v. Sullivan, 930 F.2d 1443, 1446 (9th Cir. 1991), abrogated on 12 13 other grounds by Sorensen v. Mink, 239 F.3d 1140, 1149 (9th Cir. 2001). Section 406(b)(1) provides that 14 a federal court that “renders a judgment favorable to a claimant . . .who was represented before the court 15 by an attorney” may grant the attorney “a reasonable fee for such representation, not in excess of 25 16 percent of the total of the past-due benefits to which the claimant is entitled by reason of such 17 18 judgment.” In passing § 406, Congress sought to protect attorneys from the nonpayment of fees, while 19 also shielding clients from unfairly large fees. Gisbrecht v. Barnhart, 535 U.S. 789, 805 (2002). 20 The Supreme Court in Gisbrecht explained that § 406(b) is meant “to control, not to displace, 21 [contingency] fee agreements between Social Security benefits claimants and their counsel.” 535 U.S. at 22 23 793. Even if a fee request under § 406(b) is within the 25 percent statutory limit, the attorney bears the 24 burden of showing that the fee sought is reasonable, and the court is responsible for serving as an 25 “independent check” to ensure the reasonableness of the fee. Id. At 807. Following Gisbrecht, the Ninth 26 Circuit has instructed that a § 406(b) fee request should be assessed by “looking first to the contingent- 27 fee agreement, then testing it for reasonableness.” Crawford v. Astrue, 586 F.3d 1142, 1149 (9th Cir. 28 2009) (en banc) (quoting Gisbrecht, 535 U.S. at 808). The court should consider “the character of the 1 specified in the contingency fee agreement] need be reduced,” for such reasons as “substandard 2 performance, delay, or benefits that are not in proportion to the time spent on the case.” Id. at 1151. The 3 reasonableness determination is not governed by the lodestar method, because “[t]he lodestar method 4 under-compensates attorneys for the risk they assume in representing [social security] claimants and 5 6 ordinarily produces remarkably smaller fees than would be produced by starting with the contingent-fee 7 agreement.” Id. at 1150. 8 Additionally, a § 406(b) fee award is offset by any award of EAJA fees. Thus, if the court 9 awards fees under both the EAJA and § 406(b), “the claimant’s attorney must refun[d] to the claimant 10 11 the amount of the smaller fee.” Gisbrecht, 535 U.S. at 796 (citation omitted). 12 III. DISCUSSION 13
14 The Court finds counsel has met her burden to demonstrate that the requested fees are 15 reasonable. As noted above, Plaintiff entered into a contingent fee agreement providing for a 25% fee, 16 which is consistent with the statutory cap. There is no evidence that Siegfried’s performance was 17 18 substandard; to the contrary, counsel’s representation resulted in Plaintiff receiving $38,485.69 in past- 19 due benefits. See Matos v. Saul, 2021 WL 1405467, at *2 (N.D. Cal. Apr. 14, 2021)(awarding 25% 20 under contingent fee agreement where plaintiff received $109,899.60 in benefits upon remand); Khlopoff 21 v. Saul, 2020 WL 7043878, at *2 (N.D. Cal. Dec. 1, 2020) (awarding 25% under contingent fee 22 23 agreement where plaintiff received $73,209.00 in benefits upon remand). 24 Plaintiff’s counsel states her non-contingency based hourly rate for appellate cases (not related to 25 Social Security) is currently $500 per hour. ECF No. 24, Ex. 1. She also states she spent 36.3 hours 26 working on this case, leading to an effective hourly rate of $265 per hour. Further, the Court is mindful 27 of the Ninth Circuit’s instruction that “lawyers are not likely to spend unnecessary time on contingency 28 fee cases in the hope of inflating their fees” because “[t]he payoff is too uncertain.” Moreno v. City of 1 ‘winning lawyer’s professional judgment as to how much time he was required to spend on the case.’” 2 Costa v. Comm’r of Soc. Sec. Admin., 690 F.3d 1132, 1136 (9th Cir. 2012) (quoting Moreno, 534 F.3d at 3 1112); see also Hearn v. Barnhart, 262 F. Supp. 2d 1033, 1037 (N.D. Cal. 2003) (“The courts recognize 4 that basing a reasonableness determination on a simple hourly rate basis is inappropriate when an 5 6 attorney is working pursuant to a reasonable contingency contract for which there runs a substantial risk 7 of loss.”). As such, the requested fee is reasonable because of the substantial risk of loss. See Crawford, 8 586 F.3d at 1153 (approving effective hourly rates of $519, $875, and $902); McCullough v. Berryhill, 9 2018 WL 6002324 (N.D. Cal. Nov. 15, 2018) (approving effectively hourly rate of $874.72); Harrell v. 10 11 Berryhill, 2018 WL 4616735, at *4 (N.D. Cal. Sept. 24, 2018) (finding de facto hourly rate of $1,213 12 reasonable under Gisbrecht); Lopez v. Colvin, 2017 WL 168060, at * 2 (N.D. Cal. Jan. 17, 2017) 13 (approving effective hourly rate of $1,131); Palos v. Colvin, 2016 WL 5110243, at * 2 (C.D. Cal. Sept. 14 20, 2016) (approving effective hourly rate of $1,546.39).
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1 UNITED STATES DISTRICT COURT 2 NORTHERN DISTRICT OF CALIFORNIA 3 4
CASE NO. 23-cv-03198-SVK 6 Plaintiff,
7 [PROPOSED] ORDER GRANTING v. PLAINTIFF’s MOTION FOR APPROVAL Acting Commissioner of Social Security, 9
10 Defendant 11 12 After Plaintiff Joseph Mirto brought this action for review of the Commissioner of Social 13 Security’s decision to deny benefits, the Court remanded the case, and the Commissioner issued a 14 favorable decision. His attorney, Katherine Siegfried, now seeks $9,621.42 in attorney fees under 15 section 206(b) of the Social Security Act, 42 U.S.C. § 406(b), as incorporated into the Supplemental 16 17 Security Income program through 42 U.S.C. §1383(d). ECF No. 24. ECF No. 36. For the following 18 reasons, the Court GRANTS the motion. 19 21 After Mr. Mirto applied for disability benefits, his application was denied initially, at 22 reconsideration, after an initial administrative hearing, and at the Appeals Council. (AR 1). This action 23 24 for judicial review was then filed pursuant to 42 U.S.C. §§ 405(g) on Mr. Mirto’s behalf. ECF No. 1. 25 This Court found in Mr. Mirto’s favor and issued an order remanding for further proceedings. ECF No. 26 24. The Court subsequently granted the parties’ stipulation for attorney fees under the Equal Access to 27 Justice Act (“EAJA”), 28 U.S.C. Sec. 2412, in the amount of $8,500. ECF No. 23. 28 On remand, the Commissioner granted Plaintiff’s application and awarded SSI payments and nearly 1 pay counsel up to 25% of any past-due benefits resulting from a favorable disability decision. ECF No. 2 24, Ex. 4. 3 In the Notice of Award, Plaintiff was informed that 25% of the past-due SSI payments amounted to 4 $9,621.42 and that this amount was set aside to pay his attorney fees. ECF No. 24, Ex. 3. 5 6 II. LEGAL STANDARD 7
8 Attorneys handling Social Security proceedings may seek fees for their work under both the 9 EAJA and the Social Security Act. While the government pays an award pursuant to the EAJA, an 10 award pursuant to 406 of the Social Security Act is paid out of a successful claimant’s past-due benefits. 11 See 42 U.S.C. § 406(b)(1)(A); Russell v. Sullivan, 930 F.2d 1443, 1446 (9th Cir. 1991), abrogated on 12 13 other grounds by Sorensen v. Mink, 239 F.3d 1140, 1149 (9th Cir. 2001). Section 406(b)(1) provides that 14 a federal court that “renders a judgment favorable to a claimant . . .who was represented before the court 15 by an attorney” may grant the attorney “a reasonable fee for such representation, not in excess of 25 16 percent of the total of the past-due benefits to which the claimant is entitled by reason of such 17 18 judgment.” In passing § 406, Congress sought to protect attorneys from the nonpayment of fees, while 19 also shielding clients from unfairly large fees. Gisbrecht v. Barnhart, 535 U.S. 789, 805 (2002). 20 The Supreme Court in Gisbrecht explained that § 406(b) is meant “to control, not to displace, 21 [contingency] fee agreements between Social Security benefits claimants and their counsel.” 535 U.S. at 22 23 793. Even if a fee request under § 406(b) is within the 25 percent statutory limit, the attorney bears the 24 burden of showing that the fee sought is reasonable, and the court is responsible for serving as an 25 “independent check” to ensure the reasonableness of the fee. Id. At 807. Following Gisbrecht, the Ninth 26 Circuit has instructed that a § 406(b) fee request should be assessed by “looking first to the contingent- 27 fee agreement, then testing it for reasonableness.” Crawford v. Astrue, 586 F.3d 1142, 1149 (9th Cir. 28 2009) (en banc) (quoting Gisbrecht, 535 U.S. at 808). The court should consider “the character of the 1 specified in the contingency fee agreement] need be reduced,” for such reasons as “substandard 2 performance, delay, or benefits that are not in proportion to the time spent on the case.” Id. at 1151. The 3 reasonableness determination is not governed by the lodestar method, because “[t]he lodestar method 4 under-compensates attorneys for the risk they assume in representing [social security] claimants and 5 6 ordinarily produces remarkably smaller fees than would be produced by starting with the contingent-fee 7 agreement.” Id. at 1150. 8 Additionally, a § 406(b) fee award is offset by any award of EAJA fees. Thus, if the court 9 awards fees under both the EAJA and § 406(b), “the claimant’s attorney must refun[d] to the claimant 10 11 the amount of the smaller fee.” Gisbrecht, 535 U.S. at 796 (citation omitted). 12 III. DISCUSSION 13
14 The Court finds counsel has met her burden to demonstrate that the requested fees are 15 reasonable. As noted above, Plaintiff entered into a contingent fee agreement providing for a 25% fee, 16 which is consistent with the statutory cap. There is no evidence that Siegfried’s performance was 17 18 substandard; to the contrary, counsel’s representation resulted in Plaintiff receiving $38,485.69 in past- 19 due benefits. See Matos v. Saul, 2021 WL 1405467, at *2 (N.D. Cal. Apr. 14, 2021)(awarding 25% 20 under contingent fee agreement where plaintiff received $109,899.60 in benefits upon remand); Khlopoff 21 v. Saul, 2020 WL 7043878, at *2 (N.D. Cal. Dec. 1, 2020) (awarding 25% under contingent fee 22 23 agreement where plaintiff received $73,209.00 in benefits upon remand). 24 Plaintiff’s counsel states her non-contingency based hourly rate for appellate cases (not related to 25 Social Security) is currently $500 per hour. ECF No. 24, Ex. 1. She also states she spent 36.3 hours 26 working on this case, leading to an effective hourly rate of $265 per hour. Further, the Court is mindful 27 of the Ninth Circuit’s instruction that “lawyers are not likely to spend unnecessary time on contingency 28 fee cases in the hope of inflating their fees” because “[t]he payoff is too uncertain.” Moreno v. City of 1 ‘winning lawyer’s professional judgment as to how much time he was required to spend on the case.’” 2 Costa v. Comm’r of Soc. Sec. Admin., 690 F.3d 1132, 1136 (9th Cir. 2012) (quoting Moreno, 534 F.3d at 3 1112); see also Hearn v. Barnhart, 262 F. Supp. 2d 1033, 1037 (N.D. Cal. 2003) (“The courts recognize 4 that basing a reasonableness determination on a simple hourly rate basis is inappropriate when an 5 6 attorney is working pursuant to a reasonable contingency contract for which there runs a substantial risk 7 of loss.”). As such, the requested fee is reasonable because of the substantial risk of loss. See Crawford, 8 586 F.3d at 1153 (approving effective hourly rates of $519, $875, and $902); McCullough v. Berryhill, 9 2018 WL 6002324 (N.D. Cal. Nov. 15, 2018) (approving effectively hourly rate of $874.72); Harrell v. 10 11 Berryhill, 2018 WL 4616735, at *4 (N.D. Cal. Sept. 24, 2018) (finding de facto hourly rate of $1,213 12 reasonable under Gisbrecht); Lopez v. Colvin, 2017 WL 168060, at * 2 (N.D. Cal. Jan. 17, 2017) 13 (approving effective hourly rate of $1,131); Palos v. Colvin, 2016 WL 5110243, at * 2 (C.D. Cal. Sept. 14 20, 2016) (approving effective hourly rate of $1,546.39). The Court therefore finds the requested fees 15 are reasonable. 16 17 Once the Court determines that the fee sought under § 406(b) is reasonable, it must account for 18 the attorney’s fees paid by the Commissioner under the EAJA. Gisbrecht, 535 U.S. at 796. “Congress 19 harmonized fees payable by the Government under EAJA with fees payable under § 406(b) out of the 20 claimant’s past-due Social Security benefits” by requiring the claimant’s attorney to refund to the 21 22 claimant the amount of the smaller fee up to the point where the claimant receives 100% of the past-due 23 benefits. Gisbrecht, 535 U.S. at 796. Here, the Court finds counsel’s § 406(b) request reasonable, and 24 therefore counsel shall refund to Plaintiff the $8,500 in EAJA fees previously awarded. See Khlopoff, 25 2020 WL 7043878, at *2 (finding § 406(b) request reasonable and directing counsel to refund to client 26 27 fees previously awarded under the EAJA). 28 4 IV. CONCLUSION 2 3 For the reasons stated above, the Court GRANTS counsel’s motion for attorney’s fees. The 4 Commissioner is directed to certify fees under 42 U.S.C. § 406(b) in the amount of $9,621.42, payable 5 6 to Katherine Siegfried. The Court ORDERS the award of attorney fees pursuant to 406(b) to be paid out 7 || of Plaintiff's past-due benefits in accordance with agency policy, to the extent that such past-due 8 || benefits are available and not used to pay an attorney fee under 406(a). Counsel is ORDERED to 9 reimburse Plaintiff the $8,500.00 in EAJA fees to offset the payment of 406(b) fees. 10 11 49 Dated: December 30, 2024 — Sesser ert 13 HONORABLE SUSAN VAN KEULEN 14 United States Magistrate Judge 15 16 17 18 19 20 21 22 23 24 25 26 27 28
23-cv-03198-SVK Petition for 406b Attorney’s Fees Propesed Order 5