2 NORTHERN DISTRICT OF CALIFORNIA 3 4 SHANA KRAFT, 5 CASE NO. 23-cv-05434-LJC Plaintiff, 6 7 v. O PE R T D I E T R IO G N R F A O N R T 4 IN 2 G U . P S L .C A . I § N 4 T 0 I 6 F ( F b ’ ) s Commissioner of Social Security, ATTORNEY FEES 8 9 Defendant. 10 11 After Plaintiff Shana Kraft brought this action for review of the Commissioner of Social 12 Security’s decision to deny benefits, the Court remanded the case, and the Commissioner issued a 13 favorable decision. Her attorney, Katherine Siegfried, now seeks $8,500 in attorney fees under section 14 206(b) of the Social Security Act, 42 U.S.C. § 406(b). ECF No. 14. For the following reasons, the Court 15 GRANTS the motion. 16 17 I. RELEVANT FACTS AND PROCEDURAL HISTORY 18 After Ms. Kraft applied for disability benefits, that application was denied initially, upon 19 reconsideration, after an initial administrative hearing, and before the Appeals Council. AR 1. Ms. Kraft 20 then brought this action for judicial review pursuant to 42 U.S.C. § 405(g). ECF No. 1. This Court 21 reversed and remanded the case for further proceedings after Defendant stipulated to a voluntary 22 23 remand. ECF No. 8. The Court subsequently granted the parties’ stipulation for attorney fees under the 24 Equal Access to Justice Act (“EAJA”), 28 U.S.C. § 2412, in the amount of $1,345. ECF No. 13. 25 On remand, the Commissioner granted Plaintiff’s application and awarded $109,599 in past-due 26 benefits. ECF No. 14, Ex. 3. Under a contingency fee agreement, Plaintiff agreed to pay counsel up to 27 25% of any past-due benefits resulting from a favorable disability decision. ECF No. 13, Ex. 4. 28 In the Notice of Award, Plaintiff was informed that 25% of the past-due disability benefits amounted to $27,399.75 and that this amount was set aside to pay her attorney fees. ECF No. 14, Ex. 3. 2 Attorneys handling Social Security proceedings may seek fees for their work under both the 3 EAJA and the Social Security Act. While the government pays an award pursuant to the EAJA, an 4 award under the Social Security Act is paid out of a successful claimant’s past-due benefits. See 42 5 U.S.C. § 406(b)(1)(A); Russell v. Sullivan, 930 F.2d 1443, 1446 (9th Cir. 1991), abrogated on other 6 grounds by Sorensen v. Mink, 239 F.3d 1140, 1149 (9th Cir. 2001). Section 406(b)(1) provides that a 7 federal court that “renders a judgment favorable to a claimant . . .who was represented before the court 8 by an attorney” may grant the attorney “a reasonable fee for such representation, not in excess of 25 9 percent of the total of the past-due benefits to which the claimant is entitled by reason of such 10 judgment.” In passing § 406, Congress sought to protect attorneys from the nonpayment of fees, while 11 also shielding clients from unfairly large fees. Gisbrecht v. Barnhart, 535 U.S. 789, 805 (2002). 12 The Supreme Court in Gisbrecht explained that § 406(b) is meant “to control, not to displace, 13 [contingency] fee agreements between Social Security benefits claimants and their counsel.” 535 U.S. at 14 793.Even if a fee request under § 406(b) is within the 25 percent statutory limit, the attorney bears the 15 burden of showing that the fee sought is reasonable, and the court is responsible for serving as an 16 17 “independent check” to ensure the reasonableness of the fee. Id. At 807. Following Gisbrecht, the Ninth 18 Circuit has instructed that a § 406(b) fee request should be assessed by “looking first to the contingent- 19 fee agreement, then testing it for reasonableness.” Crawford v. Astrue, 586 F.3d 1142, 1149 (9th Cir. 20 2009) (en banc) (quoting Gisbrecht, 535 U.S. at 808). The court should consider “the character of the 21 representation and the results the representative achieved,” and determine “whether the amount [of fees 22 specified in the contingency fee agreement] need be reduced,” for such reasons as “substandard 23 performance, delay, or benefits that are not in proportion to the time spent on the case.” Id. at 1151. The 24 reasonableness determination is not governed by the lodestar method, because “[t]he lodestar method 25 under-compensates attorneys for the risk they assume in representing [social security] claimants and 26 ordinarily produces remarkably smaller fees than would be produced by starting with the contingent-fee 27 agreement.” Id. at 1150. 28 2 The Court finds counsel has met her burden to demonstrate that the requested fees are 3 reasonable. As noted above, Plaintiff entered into a contingent fee agreement providing for a 25% fee, 4 which is consistent with the statutory cap. Counsel’s requested fee is substantially lower than the fee 5 Plaintiff agreed to pay at the beginning of the litigation. There is no evidence that Siegfried’s 6 performance was substandard; to the contrary, counsel’s representation resulted in Plaintiff receiving 7 $109,599 in past-due benefits. See Matos v. Saul, 2021 WL 1405467, at *2 (N.D. Cal. Apr. 14, 2021) 8 (awarding 25% under contingent fee agreement where plaintiff received $109,899.60 in benefits upon 9 remand); Khlopoff v. Saul, 2020 WL 7043878, at *2 (N.D. Cal. Dec. 1, 2020) (awarding 25% under 10 contingent fee agreement where plaintiff received $73,209.00 in benefits upon remand). 11 Plaintiff’s counsel states her non-contingency based hourly rate for appellate cases (not related to 12 Social Security) is currently $500 per hour. ECF No. 14, Ex. 1. She also states she spent 5.7 hours 13 working on this case, leading to an effective hourly rate of $1,491 per hour. Further, the Court is mindful 14 of the Ninth Circuit’s instruction that “lawyers are not likely to spend unnecessary time on contingency 15 fee cases in the hope of inflating their fees” because “[t]he payoff is too uncertain.” Moreno v. City of 16 17 Sacramento, 534 F.3d 1106, 1112 (9th Cir. 2008). “As a result, courts should generally defer to the 18 ‘winning lawyer’s professional judgment as to how much time he was required to spend on the case.’” 19 Costa v. Comm’r of Soc. Sec. Admin., 690 F.3d 1132, 1136 (9th Cir. 2012) (quoting Moreno, 534 F.3d at 20 1112); see also Hearn v. Barnhart, 262 F. Supp. 2d 1033, 1037 (N.D. Cal. 2003) (“The courts recognize 21 that basing a reasonableness determination on a simple hourly rate basis is inappropriate when an 22 attorney is working pursuant to a reasonable contingency contract for which there runs a substantial risk 23 of loss.”). As such, the requested fee is reasonable because of the substantial risk of loss. See Crawford, 24 586 F.3d at 1153 (approving effective hourly rates of $519, $875, and $902); McCullough v. Berryhill, 25 2018 WL 6002324 (N.D. Cal. Nov. 15, 2018) (approving effectively hourly rate of $874.72); Harrell v. 26 Berryhill, 2018 WL 4616735, at *4 (N.D. Cal. Sept. 24, 2018) (finding de facto hourly rate of $1,213 27 reasonable under Gisbrecht); Lopez v. Colvin, 2017 WL 168060, at * 2 (N.D. Cal. Jan. 17, 2017) 28 (approving effective hourly rate of $1,131); Palos v. Colvin, 2016 WL 5110243, at * 2 (C.D. Cal. Sept.
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2 NORTHERN DISTRICT OF CALIFORNIA 3 4 SHANA KRAFT, 5 CASE NO. 23-cv-05434-LJC Plaintiff, 6 7 v. O PE R T D I E T R IO G N R F A O N R T 4 IN 2 G U . P S L .C A . I § N 4 T 0 I 6 F ( F b ’ ) s Commissioner of Social Security, ATTORNEY FEES 8 9 Defendant. 10 11 After Plaintiff Shana Kraft brought this action for review of the Commissioner of Social 12 Security’s decision to deny benefits, the Court remanded the case, and the Commissioner issued a 13 favorable decision. Her attorney, Katherine Siegfried, now seeks $8,500 in attorney fees under section 14 206(b) of the Social Security Act, 42 U.S.C. § 406(b). ECF No. 14. For the following reasons, the Court 15 GRANTS the motion. 16 17 I. RELEVANT FACTS AND PROCEDURAL HISTORY 18 After Ms. Kraft applied for disability benefits, that application was denied initially, upon 19 reconsideration, after an initial administrative hearing, and before the Appeals Council. AR 1. Ms. Kraft 20 then brought this action for judicial review pursuant to 42 U.S.C. § 405(g). ECF No. 1. This Court 21 reversed and remanded the case for further proceedings after Defendant stipulated to a voluntary 22 23 remand. ECF No. 8. The Court subsequently granted the parties’ stipulation for attorney fees under the 24 Equal Access to Justice Act (“EAJA”), 28 U.S.C. § 2412, in the amount of $1,345. ECF No. 13. 25 On remand, the Commissioner granted Plaintiff’s application and awarded $109,599 in past-due 26 benefits. ECF No. 14, Ex. 3. Under a contingency fee agreement, Plaintiff agreed to pay counsel up to 27 25% of any past-due benefits resulting from a favorable disability decision. ECF No. 13, Ex. 4. 28 In the Notice of Award, Plaintiff was informed that 25% of the past-due disability benefits amounted to $27,399.75 and that this amount was set aside to pay her attorney fees. ECF No. 14, Ex. 3. 2 Attorneys handling Social Security proceedings may seek fees for their work under both the 3 EAJA and the Social Security Act. While the government pays an award pursuant to the EAJA, an 4 award under the Social Security Act is paid out of a successful claimant’s past-due benefits. See 42 5 U.S.C. § 406(b)(1)(A); Russell v. Sullivan, 930 F.2d 1443, 1446 (9th Cir. 1991), abrogated on other 6 grounds by Sorensen v. Mink, 239 F.3d 1140, 1149 (9th Cir. 2001). Section 406(b)(1) provides that a 7 federal court that “renders a judgment favorable to a claimant . . .who was represented before the court 8 by an attorney” may grant the attorney “a reasonable fee for such representation, not in excess of 25 9 percent of the total of the past-due benefits to which the claimant is entitled by reason of such 10 judgment.” In passing § 406, Congress sought to protect attorneys from the nonpayment of fees, while 11 also shielding clients from unfairly large fees. Gisbrecht v. Barnhart, 535 U.S. 789, 805 (2002). 12 The Supreme Court in Gisbrecht explained that § 406(b) is meant “to control, not to displace, 13 [contingency] fee agreements between Social Security benefits claimants and their counsel.” 535 U.S. at 14 793.Even if a fee request under § 406(b) is within the 25 percent statutory limit, the attorney bears the 15 burden of showing that the fee sought is reasonable, and the court is responsible for serving as an 16 17 “independent check” to ensure the reasonableness of the fee. Id. At 807. Following Gisbrecht, the Ninth 18 Circuit has instructed that a § 406(b) fee request should be assessed by “looking first to the contingent- 19 fee agreement, then testing it for reasonableness.” Crawford v. Astrue, 586 F.3d 1142, 1149 (9th Cir. 20 2009) (en banc) (quoting Gisbrecht, 535 U.S. at 808). The court should consider “the character of the 21 representation and the results the representative achieved,” and determine “whether the amount [of fees 22 specified in the contingency fee agreement] need be reduced,” for such reasons as “substandard 23 performance, delay, or benefits that are not in proportion to the time spent on the case.” Id. at 1151. The 24 reasonableness determination is not governed by the lodestar method, because “[t]he lodestar method 25 under-compensates attorneys for the risk they assume in representing [social security] claimants and 26 ordinarily produces remarkably smaller fees than would be produced by starting with the contingent-fee 27 agreement.” Id. at 1150. 28 2 The Court finds counsel has met her burden to demonstrate that the requested fees are 3 reasonable. As noted above, Plaintiff entered into a contingent fee agreement providing for a 25% fee, 4 which is consistent with the statutory cap. Counsel’s requested fee is substantially lower than the fee 5 Plaintiff agreed to pay at the beginning of the litigation. There is no evidence that Siegfried’s 6 performance was substandard; to the contrary, counsel’s representation resulted in Plaintiff receiving 7 $109,599 in past-due benefits. See Matos v. Saul, 2021 WL 1405467, at *2 (N.D. Cal. Apr. 14, 2021) 8 (awarding 25% under contingent fee agreement where plaintiff received $109,899.60 in benefits upon 9 remand); Khlopoff v. Saul, 2020 WL 7043878, at *2 (N.D. Cal. Dec. 1, 2020) (awarding 25% under 10 contingent fee agreement where plaintiff received $73,209.00 in benefits upon remand). 11 Plaintiff’s counsel states her non-contingency based hourly rate for appellate cases (not related to 12 Social Security) is currently $500 per hour. ECF No. 14, Ex. 1. She also states she spent 5.7 hours 13 working on this case, leading to an effective hourly rate of $1,491 per hour. Further, the Court is mindful 14 of the Ninth Circuit’s instruction that “lawyers are not likely to spend unnecessary time on contingency 15 fee cases in the hope of inflating their fees” because “[t]he payoff is too uncertain.” Moreno v. City of 16 17 Sacramento, 534 F.3d 1106, 1112 (9th Cir. 2008). “As a result, courts should generally defer to the 18 ‘winning lawyer’s professional judgment as to how much time he was required to spend on the case.’” 19 Costa v. Comm’r of Soc. Sec. Admin., 690 F.3d 1132, 1136 (9th Cir. 2012) (quoting Moreno, 534 F.3d at 20 1112); see also Hearn v. Barnhart, 262 F. Supp. 2d 1033, 1037 (N.D. Cal. 2003) (“The courts recognize 21 that basing a reasonableness determination on a simple hourly rate basis is inappropriate when an 22 attorney is working pursuant to a reasonable contingency contract for which there runs a substantial risk 23 of loss.”). As such, the requested fee is reasonable because of the substantial risk of loss. See Crawford, 24 586 F.3d at 1153 (approving effective hourly rates of $519, $875, and $902); McCullough v. Berryhill, 25 2018 WL 6002324 (N.D. Cal. Nov. 15, 2018) (approving effectively hourly rate of $874.72); Harrell v. 26 Berryhill, 2018 WL 4616735, at *4 (N.D. Cal. Sept. 24, 2018) (finding de facto hourly rate of $1,213 27 reasonable under Gisbrecht); Lopez v. Colvin, 2017 WL 168060, at * 2 (N.D. Cal. Jan. 17, 2017) 28 (approving effective hourly rate of $1,131); Palos v. Colvin, 2016 WL 5110243, at * 2 (C.D. Cal. Sept. 20, 2016) (approving effective hourly rate of $1,546.39). The Court therefore finds the requested fees I Once the Court determines that the fee sought under § 406(b) is reasonable, it must account for 2 || the attorney’s fees paid by the Commissioner under the EAJA. Gisbrecht, 535 U.S. at 796. “Congress 3 || harmonized fees payable by the Government under EAJA with fees payable under § 406(b) out of the 4 || claimant’s past-due Social Security benefits” by requiring the claimant’s attorney to refund to the > || claimant the amount of the smaller fee up to the point where the claimant receives 100% of the past-due || benefits. Gisbrecht, 535 U.S. at 796. Here, the Court finds counsel’s § 406(b) request reasonable, and ’ therefore counsel shall refund to Plaintiff the $1,345 in EAJA fees previously awarded. See Khlopoff, 2020 WL 7043878, at *2 (finding § 406(b) request reasonable and directing counsel to refund to client fees previously awarded under the EAJA). 10 11 CONCLUSION 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 $8,500, payable to 15 Katherine Siegfried. The Court ORDERS the award of attorney fees pursuant to 406(b) to be paid out of 16 || Plaintiffs past-due benefits in accordance with agency policy, to the extent that such past-due benefits 17 || are available and not used to pay an attorney fee under 406(a). Counsel is ORDERED to reimburse 1g || Plaintiff the $1,345.00 in EAJA fees to offset the payment of 406(b) fees. 19 20 || IT IS SO ORDERED. 21 22 || Dated: December 9, 2025 Fe / Mart 3 HON LE USA J. CISNEROS United States District Court Judge
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