4 5 6 UNITED STATES DISTRICT COURT 7 EASTERN DISTRICT OF CALIFORNIA 8 CLARISA CORCHADO, Case No. 1:21-cv-00213-EPG 9 Plaintiff, ORDER GRANTING, IN PART, MOTION 10 FOR ATTORNEY’S FEES PURSUANT 11 v. TO 42 U.S.C. § 406(b) COMMISSIONER OF SOCIAL SECURITY, 12 (ECF No. 30) Defendant. 13 14 On May 12, 2025, Attorney Jonathan O. Peña, counsel for Plaintiff Clarisa Corchado, 15 filed a motion for an award of $39,955.75 in attorney’s fees under 42 U.S.C. § 406(b). (ECF No. 16 30). Plaintiff and the Commissioner of Social Security were each served with a copy of the 17 motion. (Id. at 9; ECF No. 35). Plaintiff has not filed any response to the motion. On May 14, 18 2025, the Commissioner filed a response providing analysis regarding the fee request but taking 19 no position on its reasonableness. (ECF No. 33). Plaintiff did not file an optional reply by the 20 June 18, 2025 deadline. (ECF No. 31). 21 For the reasons set forth below, the motion for an award of attorney’s fees will be granted, 22 in part, in the amount of $31,964.60, with counsel reimbursing Plaintiff for $6,199.89 in fees 23 received pursuant to the Equal Access to Justice Act (EAJA), 28 U.S.C. § 2412(d). (See ECF No. 24 29). 25 I. BACKGROUND 26 Plaintiff filed the complaint in this case on February 19, 2021. (ECF No. 1). The parties 27 consented to this case proceeding before the undersigned. (ECF No. 12). Plaintiff filed a motion 28 for summary judgment on April 1, 2022. (ECF No. 24). However, before the Court ruled on the 1 motion, the parties submitted a stipulation to remand the case under sentence four of 42 U.S.C. § 2 405(g), which stipulation the Court approved on April 27, 2022. (ECF No. 26). 3 On remand, the Commissioner calculated Plaintiff’s past-due benefits at $159,823 and 4 25%, i.e., $39,955.75 was withheld to pay Plaintiff’s representative. (ECF No. 30, p. 3; ECF No. 30-2, p. 4). This matter is now before the Court on counsel’s motion, seeking an award of 5 $39,955.75. 6 II. DISCUSSION 7 Under the Social Security Act, attorneys may seek a reasonable fee for cases in which 8 they have successfully represented social security claimants. Section 406(b) provides: 9 Whenever a court renders a judgment favorable to a claimant under this subchapter 10 who was represented before the court by an attorney, the court may determine and allow as part of its judgment a reasonable fee for such representation, not in excess 11 of 25 percent of the total of the past-due benefits to which the claimant is entitled by reason of such judgment, and the Commissioner of Social Security may . . . 12 certify the amount of such fee for payment to such attorney out of, and not in 13 addition to, the amount of such past-due benefits . . . . 14 42 U.S.C. § 406(b)(1)(A) (emphasis added). “In contrast to fees awarded under fee-shifting provisions such as 42 U.S.C. § 1988, the 15 [§ 406(b)] fee is paid by the claimant out of the past-due benefits awarded; the losing party is not 16 responsible for payment.” Crawford v. Astrue, 586 F.3d 1142, 1147 (9th Cir. 2009) (en banc) 17 (citing Gisbrecht v. Barnhart, 535 U.S. 789, 802 (2002)). Even though the § 406(b) fee award is 18 not paid by the Government, the Commissioner “plays a part in the fee determination resembling 19 that of a trustee for the claimant[].” Gisbrecht, 535 U.S. at 798 n.6. The goal of awarding fees 20 under § 406(b) was to prohibit “exorbitant fees” from being collected by attorneys but also to 21 provide sufficient fee awards “to encourage adequate representation of claimants.” Crawford, 586 22 F.3d at 1149 (internal citations omitted). 23 The 25% maximum fee is not an automatic entitlement, and courts are required to ensure 24 that the requested fee is reasonable. Gisbrecht, 535 U.S. at 808-09 (holding that § 406(b) does not 25 displace contingent-fee agreements within the statutory ceiling; instead, § 406(b) instructs courts 26 to review for reasonableness fees yielded by those agreements). “Within the 25 percent boundary 27 . . . the attorney for the successful claimant must show that the fee sought is reasonable for the 28 1 services rendered.” Id. at 807; see also Crawford, 586 F.3d at 1148 (noting that § 406(b) “does 2 not specify how courts should determine whether a requested fee is reasonable” but “provides 3 only that the fee must not exceed 25% of the past-due benefits awarded”). 4 Generally, “a district court charged with determining a reasonable fee award under § 406(b)(1)(A) must respect ‘the primacy of lawful attorney-client fee arrangements,’ . . . 5 ‘looking first to the contingent-fee agreement, then testing it for reasonableness.’” Crawford, 586 6 F.3d at 1148 (quoting Gisbrecht, 535 U.S. at 808). The United States Supreme Court has 7 identified several factors that may be considered in determining whether a fee award under a 8 contingent-fee agreement is unreasonable and therefore subject to reduction: (1) the character of 9 the representation; (2) the results achieved by the representative; (3) whether the attorney engaged 10 in dilatory conduct in order to increase the accrued amount of past-due benefits; (4) whether the 11 benefits are large in comparison to the amount of time counsel spent on the case; and (5) the 12 attorney’s record of hours worked. Id. (citing Gisbrecht, 535 U.S. at 807-08). 13 Here, the fee agreement in this case provides as follows: 14 It is possible that I will not pay any attorney fee out of my past-due benefits for 15 my attorney’s work on my behalf in court, but rather my attorney will receive the EAJA award as his or her sole compensation for representing me in court. 16 However, my attorney has the right under this contract to ask the court to award as much as 25% of my past-due benefits for representing me in court. If the court 17 awards an attorney fee out of my past-due benefits and also awards an EAJA fee for that same work, my attorney must refund to me the smaller fee. 18 (ECF No. 30-3, p. 1). 19 The Court has considered the character of counsel’s representation of Plaintiff and the 20 good results achieved by counsel, which included a stipulated remand for further proceedings and 21 an eventual award of benefits. There is no indication of substandard performance by counsel and 22 there is no evidence that counsel engaged in any dilatory conduct resulting in delay. 23 However, the Court concludes that counsel has not met counsel’s “burden of establishing 24 that the fee sought is reasonable” when considering all the circumstances of this case. See 25 Crawford, 586 F.3d at 1148. Notably, counsel seeks an award of $39,955.75—or 25% of the total 26 award of past-due benefits—based on 28.5 hours of work, which results in an approximate hourly 27 rate of $1402. While the Court appreciates counsel’s work on this case and the contingent nature 28 1 of such representation (as further discussed below), it finds such an award to be unreasonable in 2 light of all the circumstances and will reduce it to 20% of $159,823—or $31,964.60—which 3 results in an approximate award of $1,122 per hour. 4 First, a reduction to 20% still results in an hourly rate even higher than rates that courts have found reasonable in social security cases.
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4 5 6 UNITED STATES DISTRICT COURT 7 EASTERN DISTRICT OF CALIFORNIA 8 CLARISA CORCHADO, Case No. 1:21-cv-00213-EPG 9 Plaintiff, ORDER GRANTING, IN PART, MOTION 10 FOR ATTORNEY’S FEES PURSUANT 11 v. TO 42 U.S.C. § 406(b) COMMISSIONER OF SOCIAL SECURITY, 12 (ECF No. 30) Defendant. 13 14 On May 12, 2025, Attorney Jonathan O. Peña, counsel for Plaintiff Clarisa Corchado, 15 filed a motion for an award of $39,955.75 in attorney’s fees under 42 U.S.C. § 406(b). (ECF No. 16 30). Plaintiff and the Commissioner of Social Security were each served with a copy of the 17 motion. (Id. at 9; ECF No. 35). Plaintiff has not filed any response to the motion. On May 14, 18 2025, the Commissioner filed a response providing analysis regarding the fee request but taking 19 no position on its reasonableness. (ECF No. 33). Plaintiff did not file an optional reply by the 20 June 18, 2025 deadline. (ECF No. 31). 21 For the reasons set forth below, the motion for an award of attorney’s fees will be granted, 22 in part, in the amount of $31,964.60, with counsel reimbursing Plaintiff for $6,199.89 in fees 23 received pursuant to the Equal Access to Justice Act (EAJA), 28 U.S.C. § 2412(d). (See ECF No. 24 29). 25 I. BACKGROUND 26 Plaintiff filed the complaint in this case on February 19, 2021. (ECF No. 1). The parties 27 consented to this case proceeding before the undersigned. (ECF No. 12). Plaintiff filed a motion 28 for summary judgment on April 1, 2022. (ECF No. 24). However, before the Court ruled on the 1 motion, the parties submitted a stipulation to remand the case under sentence four of 42 U.S.C. § 2 405(g), which stipulation the Court approved on April 27, 2022. (ECF No. 26). 3 On remand, the Commissioner calculated Plaintiff’s past-due benefits at $159,823 and 4 25%, i.e., $39,955.75 was withheld to pay Plaintiff’s representative. (ECF No. 30, p. 3; ECF No. 30-2, p. 4). This matter is now before the Court on counsel’s motion, seeking an award of 5 $39,955.75. 6 II. DISCUSSION 7 Under the Social Security Act, attorneys may seek a reasonable fee for cases in which 8 they have successfully represented social security claimants. Section 406(b) provides: 9 Whenever a court renders a judgment favorable to a claimant under this subchapter 10 who was represented before the court by an attorney, the court may determine and allow as part of its judgment a reasonable fee for such representation, not in excess 11 of 25 percent of the total of the past-due benefits to which the claimant is entitled by reason of such judgment, and the Commissioner of Social Security may . . . 12 certify the amount of such fee for payment to such attorney out of, and not in 13 addition to, the amount of such past-due benefits . . . . 14 42 U.S.C. § 406(b)(1)(A) (emphasis added). “In contrast to fees awarded under fee-shifting provisions such as 42 U.S.C. § 1988, the 15 [§ 406(b)] fee is paid by the claimant out of the past-due benefits awarded; the losing party is not 16 responsible for payment.” Crawford v. Astrue, 586 F.3d 1142, 1147 (9th Cir. 2009) (en banc) 17 (citing Gisbrecht v. Barnhart, 535 U.S. 789, 802 (2002)). Even though the § 406(b) fee award is 18 not paid by the Government, the Commissioner “plays a part in the fee determination resembling 19 that of a trustee for the claimant[].” Gisbrecht, 535 U.S. at 798 n.6. The goal of awarding fees 20 under § 406(b) was to prohibit “exorbitant fees” from being collected by attorneys but also to 21 provide sufficient fee awards “to encourage adequate representation of claimants.” Crawford, 586 22 F.3d at 1149 (internal citations omitted). 23 The 25% maximum fee is not an automatic entitlement, and courts are required to ensure 24 that the requested fee is reasonable. Gisbrecht, 535 U.S. at 808-09 (holding that § 406(b) does not 25 displace contingent-fee agreements within the statutory ceiling; instead, § 406(b) instructs courts 26 to review for reasonableness fees yielded by those agreements). “Within the 25 percent boundary 27 . . . the attorney for the successful claimant must show that the fee sought is reasonable for the 28 1 services rendered.” Id. at 807; see also Crawford, 586 F.3d at 1148 (noting that § 406(b) “does 2 not specify how courts should determine whether a requested fee is reasonable” but “provides 3 only that the fee must not exceed 25% of the past-due benefits awarded”). 4 Generally, “a district court charged with determining a reasonable fee award under § 406(b)(1)(A) must respect ‘the primacy of lawful attorney-client fee arrangements,’ . . . 5 ‘looking first to the contingent-fee agreement, then testing it for reasonableness.’” Crawford, 586 6 F.3d at 1148 (quoting Gisbrecht, 535 U.S. at 808). The United States Supreme Court has 7 identified several factors that may be considered in determining whether a fee award under a 8 contingent-fee agreement is unreasonable and therefore subject to reduction: (1) the character of 9 the representation; (2) the results achieved by the representative; (3) whether the attorney engaged 10 in dilatory conduct in order to increase the accrued amount of past-due benefits; (4) whether the 11 benefits are large in comparison to the amount of time counsel spent on the case; and (5) the 12 attorney’s record of hours worked. Id. (citing Gisbrecht, 535 U.S. at 807-08). 13 Here, the fee agreement in this case provides as follows: 14 It is possible that I will not pay any attorney fee out of my past-due benefits for 15 my attorney’s work on my behalf in court, but rather my attorney will receive the EAJA award as his or her sole compensation for representing me in court. 16 However, my attorney has the right under this contract to ask the court to award as much as 25% of my past-due benefits for representing me in court. If the court 17 awards an attorney fee out of my past-due benefits and also awards an EAJA fee for that same work, my attorney must refund to me the smaller fee. 18 (ECF No. 30-3, p. 1). 19 The Court has considered the character of counsel’s representation of Plaintiff and the 20 good results achieved by counsel, which included a stipulated remand for further proceedings and 21 an eventual award of benefits. There is no indication of substandard performance by counsel and 22 there is no evidence that counsel engaged in any dilatory conduct resulting in delay. 23 However, the Court concludes that counsel has not met counsel’s “burden of establishing 24 that the fee sought is reasonable” when considering all the circumstances of this case. See 25 Crawford, 586 F.3d at 1148. Notably, counsel seeks an award of $39,955.75—or 25% of the total 26 award of past-due benefits—based on 28.5 hours of work, which results in an approximate hourly 27 rate of $1402. While the Court appreciates counsel’s work on this case and the contingent nature 28 1 of such representation (as further discussed below), it finds such an award to be unreasonable in 2 light of all the circumstances and will reduce it to 20% of $159,823—or $31,964.60—which 3 results in an approximate award of $1,122 per hour. 4 First, a reduction to 20% still results in an hourly rate even higher than rates that courts have found reasonable in social security cases. See, e.g., Crawford, 586 F.3d at 1153 (explaining 5 that the majority opinion found reasonable effective hourly rates equaling $519, $875, and $902) 6 (J. Clifton, concurring in part and dissenting in part); Marquez v. Comm’r of Soc. Sec., No. 1:21- 7 CV-00205-GSA, 2025 WL 490143, at *2 (E.D. Cal. Feb. 13, 2025) (characterizing $708 per hour 8 as “a substantial hourly rate); Hearn v. Barnhart, 262 F.Supp.2d 1033, 1037 (N.D. Cal. 2003) 9 (collecting § 406(b) cases awarding de facto hourly rates ranging from $187.55 to $694.44). 10 Second, the Court notes that counsel’s “regular, non-contingent hourly rate is 11 $500.00/hour.” (ECF No. 30, p. 7). Awarding $1,122 per hour still yields more than twice 12 counsel’s normal rate. Any higher amount would be unreasonable, especially considering that this 13 case was ultimately remanded pursuant to the parties’ agreement. (ECF No. 25). 14 Third, in making this determination, the Court recognizes counsel’s assumption of risk in 15 agreeing to represent Plaintiff under a contingency fee agreement. Here, counsel accepted a risk 16 of loss in representing Plaintiff, whose application had already been denied at the administrative 17 level. Plaintiff agreed to the fee, and counsel secured a remand leading to an award of benefits. 18 However, an award of 20% of Plaintiff’s past due benefits—or $31,964.60—based on 28.5 hours 19 of work, still adequately compensates counsel for the risks involved in this case without resulting 20 in a windfall. 21 Thus, the Court finds that an award of attorney fees in the amount of $31,964.60 is 22 appropriate. An award of § 406(b) fees, however, must be offset by the prior award of fees 23 granted under the EAJA. See 28 U.S.C. § 2412; Gisbrecht, 535 U.S. at 796. Plaintiff was awarded $6,199.89 in EAJA fees, and counsel agrees to refund these fees. (ECF No. 30, p. 6; see ECF No. 24 29). 25 \\\ 26 \\\ 27 \\\ 28 1 | IN. CONCLUSION AND ORDER 2 For the reasons stated above, IT IS ORDERED as follows: 3 1. The motion for attorney fees (ECF No. 30) under 42 U.S.C. § 406(b) is granted, in 4 | part, in the amount of $31,964.60. 5 2. Plaintiff’s counsel shall refund Plaintiff $6,199.89 for the EAJA fees previously 6 awarded pursuant to 28 U.S.C. § 2412(d) upon the receipt of the attorney fee award. 7 3. The Clerk of the Court is respectfully directed to serve a copy of this order on Plaintiff 8 at 420 Adams Ave., Los Banos, CA 93635. (ECF No. 35, p. 2). | IT IS SO ORDERED. 10 1, | Dated: _July 7, 2025 [see ey UNITED STATES MAGISTRATE JUDGE 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28