1 2 3 4 5 6 UNITED STATES DISTRICT COURT 7 EASTERN DISTRICT OF CALIFORNIA 8
9 ROBERT ALLEN DRAGON, Case No. 1:19-cv-00512-SKO 10 Plaintiff, ORDER GRANTING PLAINTIFF’S 11 v. COUNSEL’S MOTION FOR ATTORNEY’S FEES PURSUANT TO 12 ANDREW SAUL, 42 U.S.C. § 406(b) Acting Commissioner of Social Security1, 13 (Doc. 25) Defendant. / 14 15 I. INTRODUCTION 16 17 On January 26, 2021, Jonathan O. Pena, Esq. (“Counsel”), counsel for Plaintiff Robert Allen 18 Dragon (“Plaintiff”), filed a motion for an award of attorney’s fees pursuant to 42 U.S.C. § 406(b) 19 (“section 406(b)”). (Doc. 25.) On January 27, 2021, 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, by no later than February 25, 2021. (Doc. 27.) Plaintiff and the 22 Commissioner were served with copies of the motion for attorney’s fees and the minute order. 23 (Docs. 26, 28.) 24 On February 17, 2021, the Commissioner filed a response, acknowledging he was not a party 25 to the contingent-fee agreement between Plaintiff and Counsel, and therefore “not in a position to 26 1 On June 17, 2019, Andrew Saul became the Commissioner of the Social Security Administration. See 27 https://www.ssa.gov/agency/commissioner.html (last visited by the court on August 26, 2019). He is therefore substituted as the defendant in this action. See 42 U.S.C. § 405(g) (referring to the “Commissioner’s Answer”); 20 28 C.F.R. § 422.210(d) (“the person holding the Office of the Commissioner shall, in his official capacity, be the proper 1 either assent or object to the fees that Counsel seeks from Plaintiff’s past-due benefits,” but 2 nevertheless taking “no position on the reasonableness of the request.” (See Doc. 29 at 2, 5.) 3 Plaintiff did not file any objection to the motion by the February 25, 2021, deadline (See Docket). 4 For the reasons set forth below, Counsel’s motion for an award of attorney’s fees is granted 5 in the amount of $23,153.37, subject to an offset of $5,700.00 in fees already awarded pursuant to 6 the Equal Access to Justice Act (“EAJA”), 28 U.S.C. § 2412(d), on April 28, 2020 (see Doc. 24). 7 II. BACKGROUND 8 Plaintiff brought the underlying action seeking judicial review of a final administrative 9 decision denying his claim for disability benefits under the Social Security Act. (Doc. 1.) The 10 parties stipulated to voluntarily remand the case pursuant to Sentence Four of 42 U.S.C. 405(g) on 11 February 18, 2020, and judgment was entered in favor of Plaintiff and against the Commissioner on 12 February 20, 2020. (Docs. 20, 21, 22.) On April 27, 2020, the parties stipulated to an award of 13 $5,700.00 in attorney fees under EAJA, which was entered on April 28, 2020. (Docs. 23, 24.) 14 On remand, the Administrative Law Judge (“ALJ”) found Plaintiff disabled. (See Doc. 25 15 at 3.) On January 24, 2021, the Commissioner issued a letter to Plaintiff approving his claim for 16 benefits and awarding him $92,613.50 in back payments beginning October 2015. (See Doc. 25-1 17 2–4.) On January 26, 2021, Counsel filed a motion for attorney’s fees in the amount of $23,153.37, 18 equal to 25% of Plaintiff’s back benefits, with an offset of $5,700.00 for EAJA fees already awarded. 19 (Doc. 25.) It is Counsel’s section 406(b) motion for attorney’s fees that is currently pending before 20 the Court. 21 III. DISCUSSION 22 Pursuant to the Social Security Act, attorneys may seek a reasonable fee for cases in which 23 they have successfully represented social security claimants. Section 406(b) provides the following: 24 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 25 allow as part of its judgment a reasonable fee for such representation, not in excess 26 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 . . . certify 27 the amount of such fee for payment to such attorney out of, and not in addition to, the amount of such past-due benefits . . . . 28 1 42 U.S.C. § 406(b)(1)(A) (emphasis added). “In contrast to fees awarded under fee-shifting 2 provisions such as 42 U.S.C. § 1988, the fee is paid by the claimant out of the past-due benefits 3 awarded; the losing party is not responsible for payment.” Crawford v. Astrue, 586 F.3d 1142, 1147 4 (9th Cir. 2009) (en banc) (citing Gisbrecht v. Barnhart, 535 U.S. 789, 802 (2002)). The 5 Commissioner has standing to challenge the award, despite that the section 406(b) attorney’s fee 6 award is not paid by the government. Craig v. Sec’y Dep’t of Health & Human Servs., 864 F.2d 7 324, 328 (4th Cir. 1989), abrogated on other grounds in Gisbrecht, 535 U.S. at 807. The goal of 8 fee awards under section 406(b) is to provide adequate incentive to represent claimants while 9 ensuring that the usually meager disability benefits received are not greatly depleted. Cotter v. 10 Bowen, 879 F.2d 359, 365 (8th Cir. 1989), abrogated on other grounds in Gisbrecht, 535 U.S. at 11 807.1 12 The 25% maximum fee is not an automatic entitlement, and courts are required to ensure 13 that the requested fee is reasonable. Gisbrecht, 535 U.S. at 808–09 (Section 406(b) does not displace 14 contingent-fee agreements within the statutory ceiling; instead, section 406(b) instructs courts to 15 review for reasonableness fees yielded by those agreements). “Within the 25 percent boundary . . . 16 the attorney for the successful claimant must show that the fee sought is reasonable for the services 17 rendered.” Id. at 807; see also Crawford, 586 F.3d at 1148 (holding that section 406(b) “does not 18 specify how courts should determine whether a requested fee is reasonable” but “provides only that 19 the fee must not exceed 25% of the past-due benefits awarded”). 20 Generally, “a district court charged with determining a reasonable fee award under 21 § 406(b)(1)(A) must respect ‘the primacy of lawful attorney-client fee arrangements,’ . . . ‘looking 22 first to the contingent-fee agreement, then testing it for reasonableness.’” Crawford, 586 F.3d at 23 1148 (quoting Gisbrecht, 535 U.S. at 793, 808).
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1 2 3 4 5 6 UNITED STATES DISTRICT COURT 7 EASTERN DISTRICT OF CALIFORNIA 8
9 ROBERT ALLEN DRAGON, Case No. 1:19-cv-00512-SKO 10 Plaintiff, ORDER GRANTING PLAINTIFF’S 11 v. COUNSEL’S MOTION FOR ATTORNEY’S FEES PURSUANT TO 12 ANDREW SAUL, 42 U.S.C. § 406(b) Acting Commissioner of Social Security1, 13 (Doc. 25) Defendant. / 14 15 I. INTRODUCTION 16 17 On January 26, 2021, Jonathan O. Pena, Esq. (“Counsel”), counsel for Plaintiff Robert Allen 18 Dragon (“Plaintiff”), filed a motion for an award of attorney’s fees pursuant to 42 U.S.C. § 406(b) 19 (“section 406(b)”). (Doc. 25.) On January 27, 2021, 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, by no later than February 25, 2021. (Doc. 27.) Plaintiff and the 22 Commissioner were served with copies of the motion for attorney’s fees and the minute order. 23 (Docs. 26, 28.) 24 On February 17, 2021, the Commissioner filed a response, acknowledging he was not a party 25 to the contingent-fee agreement between Plaintiff and Counsel, and therefore “not in a position to 26 1 On June 17, 2019, Andrew Saul became the Commissioner of the Social Security Administration. See 27 https://www.ssa.gov/agency/commissioner.html (last visited by the court on August 26, 2019). He is therefore substituted as the defendant in this action. See 42 U.S.C. § 405(g) (referring to the “Commissioner’s Answer”); 20 28 C.F.R. § 422.210(d) (“the person holding the Office of the Commissioner shall, in his official capacity, be the proper 1 either assent or object to the fees that Counsel seeks from Plaintiff’s past-due benefits,” but 2 nevertheless taking “no position on the reasonableness of the request.” (See Doc. 29 at 2, 5.) 3 Plaintiff did not file any objection to the motion by the February 25, 2021, deadline (See Docket). 4 For the reasons set forth below, Counsel’s motion for an award of attorney’s fees is granted 5 in the amount of $23,153.37, subject to an offset of $5,700.00 in fees already awarded pursuant to 6 the Equal Access to Justice Act (“EAJA”), 28 U.S.C. § 2412(d), on April 28, 2020 (see Doc. 24). 7 II. BACKGROUND 8 Plaintiff brought the underlying action seeking judicial review of a final administrative 9 decision denying his claim for disability benefits under the Social Security Act. (Doc. 1.) The 10 parties stipulated to voluntarily remand the case pursuant to Sentence Four of 42 U.S.C. 405(g) on 11 February 18, 2020, and judgment was entered in favor of Plaintiff and against the Commissioner on 12 February 20, 2020. (Docs. 20, 21, 22.) On April 27, 2020, the parties stipulated to an award of 13 $5,700.00 in attorney fees under EAJA, which was entered on April 28, 2020. (Docs. 23, 24.) 14 On remand, the Administrative Law Judge (“ALJ”) found Plaintiff disabled. (See Doc. 25 15 at 3.) On January 24, 2021, the Commissioner issued a letter to Plaintiff approving his claim for 16 benefits and awarding him $92,613.50 in back payments beginning October 2015. (See Doc. 25-1 17 2–4.) On January 26, 2021, Counsel filed a motion for attorney’s fees in the amount of $23,153.37, 18 equal to 25% of Plaintiff’s back benefits, with an offset of $5,700.00 for EAJA fees already awarded. 19 (Doc. 25.) It is Counsel’s section 406(b) motion for attorney’s fees that is currently pending before 20 the Court. 21 III. DISCUSSION 22 Pursuant to the Social Security Act, attorneys may seek a reasonable fee for cases in which 23 they have successfully represented social security claimants. Section 406(b) provides the following: 24 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 25 allow as part of its judgment a reasonable fee for such representation, not in excess 26 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 . . . certify 27 the amount of such fee for payment to such attorney out of, and not in addition to, the amount of such past-due benefits . . . . 28 1 42 U.S.C. § 406(b)(1)(A) (emphasis added). “In contrast to fees awarded under fee-shifting 2 provisions such as 42 U.S.C. § 1988, the fee is paid by the claimant out of the past-due benefits 3 awarded; the losing party is not responsible for payment.” Crawford v. Astrue, 586 F.3d 1142, 1147 4 (9th Cir. 2009) (en banc) (citing Gisbrecht v. Barnhart, 535 U.S. 789, 802 (2002)). The 5 Commissioner has standing to challenge the award, despite that the section 406(b) attorney’s fee 6 award is not paid by the government. Craig v. Sec’y Dep’t of Health & Human Servs., 864 F.2d 7 324, 328 (4th Cir. 1989), abrogated on other grounds in Gisbrecht, 535 U.S. at 807. The goal of 8 fee awards under section 406(b) is to provide adequate incentive to represent claimants while 9 ensuring that the usually meager disability benefits received are not greatly depleted. Cotter v. 10 Bowen, 879 F.2d 359, 365 (8th Cir. 1989), abrogated on other grounds in Gisbrecht, 535 U.S. at 11 807.1 12 The 25% maximum fee is not an automatic entitlement, and courts are required to ensure 13 that the requested fee is reasonable. Gisbrecht, 535 U.S. at 808–09 (Section 406(b) does not displace 14 contingent-fee agreements within the statutory ceiling; instead, section 406(b) instructs courts to 15 review for reasonableness fees yielded by those agreements). “Within the 25 percent boundary . . . 16 the attorney for the successful claimant must show that the fee sought is reasonable for the services 17 rendered.” Id. at 807; see also Crawford, 586 F.3d at 1148 (holding that section 406(b) “does not 18 specify how courts should determine whether a requested fee is reasonable” but “provides only that 19 the fee must not exceed 25% of the past-due benefits awarded”). 20 Generally, “a district court charged with determining a reasonable fee award under 21 § 406(b)(1)(A) must respect ‘the primacy of lawful attorney-client fee arrangements,’ . . . ‘looking 22 first to the contingent-fee agreement, then testing it for reasonableness.’” Crawford, 586 F.3d at 23 1148 (quoting Gisbrecht, 535 U.S. at 793, 808). The United States Supreme Court has identified 24 several factors that may be considered in determining whether a fee award under a contingent-fee 25 agreement is unreasonable and therefore subject to reduction by the court: (1) the character of the 26 representation; (2) the results achieved by the representative; (3) whether the attorney engaged in 27 dilatory conduct in order to increase the accrued amount of past-due benefits; (4) whether the 28 benefits are large in comparison to the amount of time counsel spent on the case; and (5) the 1 attorney’s record of hours worked and counsel’s regular hourly billing charge for non-contingent 2 cases. Id. (citing Gisbrecht, 535 U.S. at 807–08). 3 Here, the fee agreement between Plaintiff and Counsel, signed by both parties, provides: 4 It is possible that I will not pay any attorney fee out of my past-due benefits for my attorney's work on my behalf in court, but rather my attorney will receive the EAJA 5 award as his or her sole compensation for representing me in court. However, my 6 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 awards an attorney 7 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. 8 9 (Doc. 25-2 (signed April 22, 2019).) 10 The Court has considered the character of Counsel’s representation of Plaintiff and the good 11 results achieved by Counsel, which included an award of benefits. Counsel spent 29.5 hours 12 representing Plaintiff, ultimately gaining a favorable decision in that the Commissioner stipulated 13 to remand the decision back to the agency for reconsideration. (Docs. 20, 21; Doc. 25-3 (time sheet 14 accounting for 29.5 attorney hours spent representing Plaintiff before this Court).) There is no 15 indication that a reduction of the award is warranted due to any substandard performance by Counsel 16 as Counsel secured a successful result for Plaintiff. There is also no evidence that counsel engaged 17 in any dilatory conduct resulting in delay. 18 Although the accepted range in the Fresno Division for attorneys like Counsel with less than 19 ten years of experience (see Doc. 25 at 7) is between $175 and $300 per hour in non-contingency 20 cases, see Silvester v. Harris, No. 1:11–CV–2137 AWI SAB, 2014 WL 7239371 at *4 (E.D. Cal. 21 Dec. 17, 2014), here the effective hourly rate requested equals $784.86 per hour (see Doc. 25 at 8). 22 This hourly rate is not excessive when compared to what the Ninth Circuit has approved in cases 23 involving social security contingency fee arrangements. See Crawford, 586 F.3d 1142, 1153 (9th 24 Cir. 2009) (explaining that the majority opinion found reasonable effective hourly rates equaling 25 $519, $875, and $902) (J. Clifton, concurring in part and dissenting in part); see also Thomas v. 26 Colvin, No. 1:11−cv−01291−SKO, 2015 WL 1529331, at *2−3 (E.D. Cal. Apr. 3, 2015) (upholding 27 an effective hourly rate of $1,093.22 for 40.8 hours of work); Jamieson v. Astrue, No. 1:09-cv-0490- 28 LJO-DLB, 2011 WL 587096, at *2 (E.D. Cal. Feb. 9, 2011) (upholding an effective hourly rate of 1 $1,169.49 for 29.5 hours of work); Palos v. Colvin, No. CV 15−04261−DTB, 2016 WL 5110243, 2 at *2 (C.D. Cal. Sept. 20, 2016) (upholding an effective hourly rate of $1,546.39 for 9.7 hours of 3 work); Villa v. Astrue, No. CIV−S−06−0846 GGH, 2010 WL 118454, at *1−2 (E.D. Cal. Jan. 7, 4 2010) (approving section 406(b) fees exceeding $1,000 per hour for 10.4 hours of work, and noting 5 that “[r]educing § 406(b) fees after Crawford is a dicey business”). Further, attorney’s fees in the 6 amount of $23,153.37 do not exceed 25% of the past-due benefits awarded and are not excessive in 7 relation to the past-due award. See generally Ortega v. Comm’r of Soc. Sec., No. 1:12–cv–01030– 8 AWI–SAB, 2015 WL 5021646, at *3 (E.D. Cal. Aug. 21, 2015) (granting petition for an award of 9 attorney’s fees pursuant to section 406(b) in the amount of $24,350.00); Thomas, 2015 WL 10 1529331, at *3 (granting petition for an award of attorney’s fees pursuant to section 406(b) in the 11 amount of $44,603.50); Boyle v. Colvin, No. 1:12–cv–00954–SMS, 2013 WL 6712552, at *2 (E.D. 12 Cal. Dec. 19, 2013) (granting petition for an award of attorney’s fees pursuant to section 406(b) in 13 the amount of $20,577.57); Jamieson, 2011 WL 587096, at *2 (recommending an award of 14 attorney’s fees pursuant to section 406(b) in the amount of $34,500). 15 In making this determination, the Court recognizes the contingent-fee nature of this case and 16 Counsel’s assumption of risk in agreeing to represent Plaintiff under such terms. “District courts 17 generally have been deferential to the terms of contingency fee contracts in § 406(b) cases.” Hearn 18 v. Barnhart, 262 F. Supp. 2d 1033, 1037 (N.D. Cal. 2003) (“Because attorneys like Mr. Sackett 19 contend with a substantial risk of loss in Title II cases, an effective hourly rate of only $450 in 20 successful cases does not provide a basis for this court to lower the fee to avoid a ‘windfall.’” 21 (quoting Gisbrecht, 535 U.S. at 807)). Attorneys who agree to represent claimants pursuant to a 22 contingent fee agreement assume the risk of receiving no compensation for their time and effort if 23 the action does not succeed. Id. Here, Counsel accepted substantial risk of loss in representing 24 Plaintiff, whose application had already been denied at the administrative level. Plaintiff agreed to 25 the contingent fee. (See Doc. 25-2.) Working efficiently and effectively, Counsel secured a 26 stipulated remand, and ultimately, the award of substantial benefits to Plaintiff. (See Docs. 20, 21, 27 25-1.) 28 1 An award of attorney’s fees pursuant to section 406(b) in the amount of $23,153.37 is, 2 therefore, appropriate. An award of section 406(b) fees, however, must be offset by any prior award 3 of attorney’s fees granted under the EAJA. 28 U.S.C. § 2412; Gisbrecht, 535 U.S. at 796. As 4 Plaintiff was previously awarded $5,700.00 in fees pursuant to the EAJA, Counsel shall refund this 5 amount to Plaintiff. 6 IV. CONCLUSION AND ORDER 7 For the reasons stated above, the Court concludes that the fees sought by Counsel pursuant 8 to section 406(b) are reasonable. Accordingly, IT IS ORDERED that: 9 1. Counsel’s motion for an award of attorney’s fees pursuant to 42 U.S.C. § 406(b) in 10 the amount of $23,153.37 (Doc. 25) is granted; 11 2. Counsel shall refund to Plaintiff $5,700.00 of the section 406(b) fees awarded as an 12 offset for the EAJA fees previously awarded pursuant to 28 U.S.C. § 2412(d) (Doc. 24); and 13 3. Counsel for Plaintiff shall file on the Court’s docket proof of service of this order 14 upon Plaintiff at his current or last known address. 15 IT IS SO ORDERED. 16
Sheila K. Oberto 17 Dated: March 17, 2021 /s/ . UNITED STATES MAGISTRATE JUDGE 18
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