1 2 3 4 5 7 EASTERN DISTRICT OF CALIFORNIA 8
9 VALERIE ANITA ANTHONY, Case No. 1:21-cv-01604-SKO 10 Plaintiff, ORDER GRANTING PLAINTIFF’S 11 v. COUNSEL’S MOTION FOR ATTORNEY’S FEES PURSUANT TO 12 42 U.S.C. § 406(b)
MARTIN O’MALLEY, 13 (Doc. 22) Acting Commissioner of Social Security1, 14 Defendant. / 15 17 On October 22, 2024, Steven G. Rosales (“Counsel”), counsel for Plaintiff Valerie Anita 18 Anthony (“Plaintiff”), filed a motion for an award of attorney’s fees pursuant to 42 U.S.C. § 406(b) 19 (“section 406(b)”). (Doc. 22.) On October 23, 2024, the Court issued a minute order requiring 20 Plaintiff and the Commissioner to file their responses in opposition or statements of non-opposition 21 to Counsel’s motion, if any, in accordance with this Court’s Local Rules. (Doc. 23.) Plaintiff and 22 the Commissioner were served with copies of the motion for attorney’s fees and the minute order. 23 (See Docs. 23 & 24.) 24 On October 25, 2024, the Commissioner timely filed a response, acknowledging he “has no 25 direct financial stake in the outcome of this Motion,” and instead “plays a part in the fee 26
27 1 On December 20, 2023, Martin O’Malley was named Commissioner of the Social Security Administration. See https://www.ssa.gov/history/commissioners.html. He is therefore substituted as the defendant in this action. See 42 28 U.S.C. § 405(g) (referring to the “Commissioner’s Answer”); 20 C.F.R. § 422.210(d) (“the person holding the Office 1 determination resembling that of a trustee for the claimants.” (Doc. 25 at 2.) In this capacity, the 2 Commissioner “neither supports nor opposes Counsel’s request for attorney’s fees under 42 U.S.C. 3 § 406(b).” (Id. at 2, 3.) Plaintiff did not file any objection to the motion by the deadline (See 4 Docket). 5 For the reasons set forth below, Counsel’s motion for an award of attorney’s fees is granted 6 in the amount of $34,044.00, subject to an offset of $5,500.00 in fees and costs already awarded 7 pursuant to the Equal Access to Justice Act (“EAJA”), 28 U.S.C. § 2412, on August 10, 2023 (see 8 Doc. 21). 10 Plaintiff brought the underlying action seeking judicial review of a final administrative 11 decision denying her claim for disability benefits under the Social Security Act. (Doc. 1.) The 12 Court reversed the Commissioner’s denial of benefits and remanded the case to the agency for 13 further proceedings. (Doc. 15.) Judgment was entered in favor of Plaintiff and against the 14 Commissioner on May 31, 2023. (Doc. 16.) The parties stipulated to an award of $5,500.00 in 15 attorney fees under the EAJA, which was entered on August 10, 2023. (Docs. 18 & 21.) 16 On remand, the Administrative Law Judge found Plaintiff disabled as of November 1, 2014. 17 (See Doc. 22-2.) On October 9, 2024, the Commissioner issued a letter to Plaintiff approving her 18 claim for benefits and awarding her $156,176.00 in back payments beginning April 2015. (See Doc. 19 22-3.) On October 22, 2024, Counsel filed a motion for attorney’s fees in the amount of $34,044.00, 20 equal to 21.8% of Plaintiff’s back benefits, with an offset of $5,500.00 for EAJA fees already 21 awarded. (Doc. 22.) Counsel’s section 406(b) motion for attorney’s fees is currently pending before 22 the Court. 24 Pursuant to the Social Security Act, attorneys may seek a reasonable fee for cases in which 25 they have successfully represented social security claimants. Section 406(b) provides the following: 26 Whenever a court renders a judgment favorable to a claimant under this subchapter who was represented before the court by an attorney, the court may determine and 27 allow as part of its judgment a reasonable fee for such representation, not in excess 28 of 25 percent of the total of the past-due benefits to which the claimant is entitled by 1 the amount of such fee for payment to such attorney out of, and not in addition to, 2 the amount of such past-due benefits . . . . 3 42 U.S.C. § 406(b)(1)(A) (emphasis added). “In contrast to fees awarded under fee-shifting 4 provisions such as 42 U.S.C. § 1988, the fee is paid by the claimant out of the past-due benefits 5 awarded; the losing party is not responsible for payment.” Crawford v. Astrue, 586 F.3d 1142, 1147 6 (9th Cir. 2009) (en banc) (citing Gisbrecht v. Barnhart, 535 U.S. 789, 802 (2002)). The 7 Commissioner has standing to challenge the award, despite that the section 406(b) attorney’s fee 8 award is not paid by the government. Craig v. Sec’y Dep’t of Health & Human Servs., 864 F.2d 9 324, 328 (4th Cir. 1989), abrogated on other grounds in Gisbrecht, 535 U.S. at 807. The goal of 10 fee awards under section 406(b) is to provide adequate incentive to represent claimants while 11 ensuring that the usually meager disability benefits received are not greatly depleted. Cotter v. 12 Bowen, 879 F.2d 359, 365 (8th Cir. 1989), abrogated on other grounds in Gisbrecht, 535 U.S. at 13 807. 14 The 25% maximum fee is not an automatic entitlement, and courts are required to ensure 15 that the requested fee is reasonable. Gisbrecht, 535 U.S. at 808–09 (Section 406(b) does not displace 16 contingent-fee agreements within the statutory ceiling; instead, section 406(b) instructs courts to 17 review for reasonableness fees yielded by those agreements). “Within the 25 percent boundary . . . 18 the attorney for the successful claimant must show that the fee sought is reasonable for the services 19 rendered.” Id. at 807; see also Crawford, 586 F.3d at 1148 (holding that section 406(b) “does not 20 specify how courts should determine whether a requested fee is reasonable” but “provides only that 21 the fee must not exceed 25% of the past-due benefits awarded”). 22 Generally, “a district court charged with determining a reasonable fee award under 23 § 406(b)(1)(A) must respect ‘the primacy of lawful attorney-client fee arrangements,’ . . . ‘looking 24 first to the contingent-fee agreement, then testing it for reasonableness.’” Crawford, 586 F.3d at 25 1148 (quoting Gisbrecht, 535 U.S. at 793, 808). The United States Supreme Court has identified 26 several factors that may be considered in determining whether a fee award under a contingent-fee 27 agreement is unreasonable and therefore subject to reduction by the court: (1) the character of the 28 representation; (2) the results achieved by the representative; (3) whether the attorney engaged in 1 dilatory conduct in order to increase the accrued amount of past-due benefits; (4) whether the 2 benefits are large in comparison to the amount of time counsel spent on the case; and (5) the 3 attorney’s record of hours worked and counsel’s regular hourly billing charge for non-contingent 4 cases. Id. (citing Gisbrecht, 535 U.S. at 807–08). 5 Here, the fee agreement between Plaintiff and the Law Offices of Lawrence D.
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1 2 3 4 5 7 EASTERN DISTRICT OF CALIFORNIA 8
9 VALERIE ANITA ANTHONY, Case No. 1:21-cv-01604-SKO 10 Plaintiff, ORDER GRANTING PLAINTIFF’S 11 v. COUNSEL’S MOTION FOR ATTORNEY’S FEES PURSUANT TO 12 42 U.S.C. § 406(b)
MARTIN O’MALLEY, 13 (Doc. 22) Acting Commissioner of Social Security1, 14 Defendant. / 15 17 On October 22, 2024, Steven G. Rosales (“Counsel”), counsel for Plaintiff Valerie Anita 18 Anthony (“Plaintiff”), filed a motion for an award of attorney’s fees pursuant to 42 U.S.C. § 406(b) 19 (“section 406(b)”). (Doc. 22.) On October 23, 2024, the Court issued a minute order requiring 20 Plaintiff and the Commissioner to file their responses in opposition or statements of non-opposition 21 to Counsel’s motion, if any, in accordance with this Court’s Local Rules. (Doc. 23.) Plaintiff and 22 the Commissioner were served with copies of the motion for attorney’s fees and the minute order. 23 (See Docs. 23 & 24.) 24 On October 25, 2024, the Commissioner timely filed a response, acknowledging he “has no 25 direct financial stake in the outcome of this Motion,” and instead “plays a part in the fee 26
27 1 On December 20, 2023, Martin O’Malley was named Commissioner of the Social Security Administration. See https://www.ssa.gov/history/commissioners.html. He is therefore substituted as the defendant in this action. See 42 28 U.S.C. § 405(g) (referring to the “Commissioner’s Answer”); 20 C.F.R. § 422.210(d) (“the person holding the Office 1 determination resembling that of a trustee for the claimants.” (Doc. 25 at 2.) In this capacity, the 2 Commissioner “neither supports nor opposes Counsel’s request for attorney’s fees under 42 U.S.C. 3 § 406(b).” (Id. at 2, 3.) Plaintiff did not file any objection to the motion by the deadline (See 4 Docket). 5 For the reasons set forth below, Counsel’s motion for an award of attorney’s fees is granted 6 in the amount of $34,044.00, subject to an offset of $5,500.00 in fees and costs already awarded 7 pursuant to the Equal Access to Justice Act (“EAJA”), 28 U.S.C. § 2412, on August 10, 2023 (see 8 Doc. 21). 10 Plaintiff brought the underlying action seeking judicial review of a final administrative 11 decision denying her claim for disability benefits under the Social Security Act. (Doc. 1.) The 12 Court reversed the Commissioner’s denial of benefits and remanded the case to the agency for 13 further proceedings. (Doc. 15.) Judgment was entered in favor of Plaintiff and against the 14 Commissioner on May 31, 2023. (Doc. 16.) The parties stipulated to an award of $5,500.00 in 15 attorney fees under the EAJA, which was entered on August 10, 2023. (Docs. 18 & 21.) 16 On remand, the Administrative Law Judge found Plaintiff disabled as of November 1, 2014. 17 (See Doc. 22-2.) On October 9, 2024, the Commissioner issued a letter to Plaintiff approving her 18 claim for benefits and awarding her $156,176.00 in back payments beginning April 2015. (See Doc. 19 22-3.) On October 22, 2024, Counsel filed a motion for attorney’s fees in the amount of $34,044.00, 20 equal to 21.8% of Plaintiff’s back benefits, with an offset of $5,500.00 for EAJA fees already 21 awarded. (Doc. 22.) Counsel’s section 406(b) motion for attorney’s fees is currently pending before 22 the Court. 24 Pursuant to the Social Security Act, attorneys may seek a reasonable fee for cases in which 25 they have successfully represented social security claimants. Section 406(b) provides the following: 26 Whenever a court renders a judgment favorable to a claimant under this subchapter who was represented before the court by an attorney, the court may determine and 27 allow as part of its judgment a reasonable fee for such representation, not in excess 28 of 25 percent of the total of the past-due benefits to which the claimant is entitled by 1 the amount of such fee for payment to such attorney out of, and not in addition to, 2 the amount of such past-due benefits . . . . 3 42 U.S.C. § 406(b)(1)(A) (emphasis added). “In contrast to fees awarded under fee-shifting 4 provisions such as 42 U.S.C. § 1988, the fee is paid by the claimant out of the past-due benefits 5 awarded; the losing party is not responsible for payment.” Crawford v. Astrue, 586 F.3d 1142, 1147 6 (9th Cir. 2009) (en banc) (citing Gisbrecht v. Barnhart, 535 U.S. 789, 802 (2002)). The 7 Commissioner has standing to challenge the award, despite that the section 406(b) attorney’s fee 8 award is not paid by the government. Craig v. Sec’y Dep’t of Health & Human Servs., 864 F.2d 9 324, 328 (4th Cir. 1989), abrogated on other grounds in Gisbrecht, 535 U.S. at 807. The goal of 10 fee awards under section 406(b) is to provide adequate incentive to represent claimants while 11 ensuring that the usually meager disability benefits received are not greatly depleted. Cotter v. 12 Bowen, 879 F.2d 359, 365 (8th Cir. 1989), abrogated on other grounds in Gisbrecht, 535 U.S. at 13 807. 14 The 25% maximum fee is not an automatic entitlement, and courts are required to ensure 15 that the requested fee is reasonable. Gisbrecht, 535 U.S. at 808–09 (Section 406(b) does not displace 16 contingent-fee agreements within the statutory ceiling; instead, section 406(b) instructs courts to 17 review for reasonableness fees yielded by those agreements). “Within the 25 percent boundary . . . 18 the attorney for the successful claimant must show that the fee sought is reasonable for the services 19 rendered.” Id. at 807; see also Crawford, 586 F.3d at 1148 (holding that section 406(b) “does not 20 specify how courts should determine whether a requested fee is reasonable” but “provides only that 21 the fee must not exceed 25% of the past-due benefits awarded”). 22 Generally, “a district court charged with determining a reasonable fee award under 23 § 406(b)(1)(A) must respect ‘the primacy of lawful attorney-client fee arrangements,’ . . . ‘looking 24 first to the contingent-fee agreement, then testing it for reasonableness.’” Crawford, 586 F.3d at 25 1148 (quoting Gisbrecht, 535 U.S. at 793, 808). The United States Supreme Court has identified 26 several factors that may be considered in determining whether a fee award under a contingent-fee 27 agreement is unreasonable and therefore subject to reduction by the court: (1) the character of the 28 representation; (2) the results achieved by the representative; (3) whether the attorney engaged in 1 dilatory conduct in order to increase the accrued amount of past-due benefits; (4) whether the 2 benefits are large in comparison to the amount of time counsel spent on the case; and (5) the 3 attorney’s record of hours worked and counsel’s regular hourly billing charge for non-contingent 4 cases. Id. (citing Gisbrecht, 535 U.S. at 807–08). 5 Here, the fee agreement between Plaintiff and the Law Offices of Lawrence D. Rohlfing, 6 signed by Plaintiff and Counsel, provides: 7 If this matter requires review of any adverse decision of the Social Security 8 Administration, the fee for successful prosecution of this matter is a separate 25% of the past due benefits awarded upon reversal of any unfavorable ALJ 9 decision for work before the court. Attorney shall seek compensation under the [EAJA] and such amount shall credit to the client for fees otherwise payable for 10 that particular work. Client shall endorse such documents as are needed to pay Attorney any amounts under the EAJA and assigns such fee awards to Attorney. 11 12 (Doc. 22-1 (executed October 28, 2021) (emphasis in original).) 13 The Court has considered the character of Counsel’s representation of Plaintiff and the good 14 results achieved by Counsel, which included an award of benefits. Counsel and his paralegals spent 15 27.5 hours representing Plaintiff, ultimately gaining a favorable decision in that the Commissioner’s 16 decision was reversed and remanded to the agency for reconsideration. (Doc. 22 at 16; Doc. 22-4 17 (time sheets accounting for 22.5 attorney hours and 5.0 paralegal hours spent representing Plaintiff 18 before this Court).) There is no indication that a reduction of the award is warranted due to any 19 substandard performance by Counsel, as they secured a successful result for Plaintiff. There is also 20 no evidence that Counsel engaged in any dilatory conduct resulting in delay. 21 Although the accepted range in the Fresno Division for attorneys like Counsel with over 22 twenty years of experience (see Doc. 22 at 17) is between $250 and $380 per hour in non- 23 contingency cases, see Silvester v. Harris, No. 1:11-cv-2137-AWI-SAB, 2014 WL 7239371 at *4 24 (E.D. Cal. Dec. 17, 2014), here the effective hourly rate requested equals $1,237.96 per hour. (See 25 Doc. 22 at 7, 10; Doc. 25 at 2.) This hourly rate is not excessive when compared to what the Ninth 26 Circuit has approved in cases involving social security contingency fee arrangements. See 27 Crawford, 586 F.3d 1142, 1153 (9th Cir. 2009) (explaining that the majority opinion found 28 reasonable effective hourly rates equaling $519, $875, and $902) (J. Clifton, concurring in part and 1 dissenting in part); see also Thomas v. Colvin, No. 1:11-cv-01291-SKO, 2015 WL 1529331, at *2−3 2 (E.D. Cal. Apr. 3, 2015) (upholding an effective hourly rate of $1,093.22 for 40.8 hours of work); 3 Jamieson v. Astrue, No. 1:09-cv-0490-LJO-DLB, 2011 WL 587096, at *2 (E.D. Cal. Feb. 9, 2011) 4 (upholding an effective hourly rate of $1,169.49 for 29.5 hours of work); Palos v. Colvin, No. CV 5 15-04261-DTB, 2016 WL 5110243, at *2 (C.D. Cal. Sept. 20, 2016) (upholding an effective hourly 6 rate of $1,546.39 for 9.7 hours of work); Villa v. Astrue, No. CIV-S−06-0846-GGH, 2010 WL 7 118454, at *1−2 (E.D. Cal. Jan. 7, 2010) (approving section 406(b) fees exceeding $1,000 per hour 8 for 10.4 hours of work, and noting that “[r]educing § 406(b) fees after Crawford is a dicey 9 business”). Further, attorney’s fees in the amount of $34,044.00 do not exceed—and are in fact less 10 than—25% of the past-due benefits awarded and are not excessive in relation to the past-due award. 11 See generally Ortega v. Comm’r of Soc. Sec., No. 1:12-cv-01030-AWI-SAB, 2015 WL 5021646, at 12 *3 (E.D. Cal. Aug. 21, 2015) (granting petition for an award of attorney’s fees pursuant to section 13 406(b) in the amount of $24,350.00); Thomas, 2015 WL 1529331, at *3 (granting petition for an 14 award of attorney’s fees pursuant to section 406(b) in the amount of $44,603.50); Boyle v. Colvin, 15 No. 1:12-cv-00954–SMS, 2013 WL 6712552, at *2 (E.D. Cal. Dec. 19, 2013) (granting petition for 16 an award of attorney’s fees pursuant to section 406(b) in the amount of $20,577.57); Jamieson, 2011 17 WL 587096, at *2 (recommending an award of attorney’s fees pursuant to section 406(b) in the 18 amount of $34,500). 19 In making this determination, the Court recognizes the contingent-fee nature of this case and 20 Counsel’s assumption of risk in agreeing to represent Plaintiff under such terms. “District courts 21 generally have been deferential to the terms of contingency fee contracts in § 406(b) cases.” Hearn 22 v. Barnhart, 262 F. Supp. 2d 1033, 1037 (N.D. Cal. 2003) (“Because attorneys like Mr. Sackett 23 contend with a substantial risk of loss in Title II cases, an effective hourly rate of only $450 in 24 successful cases does not provide a basis for this court to lower the fee to avoid a ‘windfall.’” 25 (quoting Gisbrecht, 535 U.S. at 807)). Attorneys who agree to represent claimants pursuant to a 26 contingent fee agreement assume the risk of receiving no compensation for their time and effort if 27 the action does not succeed. Id. Here, Counsel accepted substantial risk of loss in representing 28 Plaintiff, whose application had already been denied at the administrative level. Plaintiff agreed to 1 the contingent fee. (See Doc. 22-1.) Working efficiently and effectively, Counsel secured a remand, 2 and ultimately, the award of substantial benefits to Plaintiff. (See Docs. 15, 22-2, 22-3.) 3 An award of attorney’s fees pursuant to section 406(b) in the amount of $34,044.00 is, 4 therefore, appropriate. An award of section 406(b) fees, however, must be offset by any prior award 5 of attorney’s fees granted under the EAJA. 28 U.S.C. § 2412; Gisbrecht, 535 U.S. at 796. As 6 Plaintiff was previously awarded $5,500.00 in fees pursuant to the EAJA, Counsel shall refund this 7 amount to Plaintiff. 9 For the foregoing reasons, the Court concludes that the fees sought by Counsel pursuant to 10 section 406(b) are reasonable. Accordingly, IT IS ORDERED that: 11 1. Counsel’s motion for an award of attorney’s fees pursuant to 42 U.S.C. § 406(b) in 12 the amount of $34,044.00 (Doc. 22) is granted; 13 2. Counsel shall refund to Plaintiff $5,500.00 of the section 406(b) fees awarded as an 14 offset for the EAJA fees previously awarded pursuant to 28 U.S.C. § 2412(d) (Doc. 21); and 15 3. Counsel for Plaintiff shall file on the Court’s docket proof of service of this order 16 upon Plaintiff at her current or last known address. 17 IT IS SO ORDERED. 18
19 Dated: November 12, 2024 /s/ Sheila K. Oberto . UNITED STATES MAGISTRATE JUDGE 20
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