1 2 3 4 5 6 UNITED STATES DISTRICT COURT 7 EASTERN DISTRICT OF CALIFORNIA 8
9 TERRIE JO FLORES, Case No. 1:18-cv-01523-SKO 10 Plaintiff, ORDER GRANTING PLAINTIFF’S 11 v. COUNSEL’S UNOPPOSED MOTION FOR ATTORNEY’S FEES PURSUANT 12 ANDREW SAUL, TO 42 U.S.C. § 406(b) Commissioner of Social Security1, 13 (Doc. 18) Defendant. 14 _____________________________________/
15 16 I. INTRODUCTION 17 On February 22, 2021, Laura E. Krank (“Counsel”), counsel for Plaintiff Terrie Jo Flores 18 (“Plaintiff”), filed a motion for an award of attorney’s fees pursuant to 42 U.S.C. § 406(b) (“section 19 406(b)”). (Doc. 18.) On February 23, 2021, the Court issued a minute order requiring Plaintiff and 20 the Commissioner to file their responses in opposition or statements of non-opposition to Counsel’s 21 motion, if any, by no later than March 24, 2021. (Doc. 19.) Plaintiff and the Commissioner were 22 served with copies of the motion for attorney’s fees and the minute order. (Docs. 18, 20.) 23 On March 22, 2021, the Commissioner filed a response, acknowledging he was not a party 24 to the contingent-fee agreement between Plaintiff and Counsel, and therefore “not in a position to 25 either assent or object to the fees that Counsel seeks from Plaintiff’s past-due benefits,” but 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 nevertheless taking “no position on the reasonableness of the request.” (See Doc. 21 at 2, 4.) 2 Plaintiff did not file any objection to the motion by the March 24, 2021 deadline. (See Docket.) 3 For the reasons set forth below, Counsel’s motion for an award of attorney’s fees is granted 4 in the amount of $28,226.00, subject to an offset of $5,415.15 in fees already awarded pursuant to 5 the Equal Access to Justice Act (“EAJA”), 28 U.S.C. § 2412(d), on March 10, 2020 (see Doc. 17). 6 II. BACKGROUND 7 Plaintiff brought the underlying action seeking judicial review of a final administrative 8 decision denying her claim for disability benefits under the Social Security Act. (Doc. 1.) The 9 Court reversed the Commissioner’s denial of benefits and remanded the case to the agency for 10 further proceedings. (Doc. 14.) Judgment was entered in favor of Plaintiff and against the 11 Commissioner on January 31, 2020. (Doc. 15.) On March 9, 2020, the parties stipulated to an 12 award of $5,415.15 in attorney fees under EAJA, which was entered on March 10, 2020. (Docs. 16, 13 17.) 14 On remand, the Commissioner found Plaintiff disabled as of October 15, 2009. (See Doc. 15 18-3.) On February 7, 2021, the Commissioner issued a letter to Plaintiff approving her claim for 16 benefits and awarding her $112,904.00 in back payments beginning February 2014. (See Doc. 18- 17 4 at 3 (indicating 25% of past due benefits totals $28,226.00).) On February 22, 2021, Counsel filed 18 a motion for attorney’s fees in the amount of $28,226.00, equal to 25% of Plaintiff’s back benefits, 19 with an offset of $5,415.15 for EAJA fees already awarded. (Doc. 18 at 1.) It is Counsel’s section 20 406(b) motion for attorney’s fees that is currently pending before 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. 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.
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1 2 3 4 5 6 UNITED STATES DISTRICT COURT 7 EASTERN DISTRICT OF CALIFORNIA 8
9 TERRIE JO FLORES, Case No. 1:18-cv-01523-SKO 10 Plaintiff, ORDER GRANTING PLAINTIFF’S 11 v. COUNSEL’S UNOPPOSED MOTION FOR ATTORNEY’S FEES PURSUANT 12 ANDREW SAUL, TO 42 U.S.C. § 406(b) Commissioner of Social Security1, 13 (Doc. 18) Defendant. 14 _____________________________________/
15 16 I. INTRODUCTION 17 On February 22, 2021, Laura E. Krank (“Counsel”), counsel for Plaintiff Terrie Jo Flores 18 (“Plaintiff”), filed a motion for an award of attorney’s fees pursuant to 42 U.S.C. § 406(b) (“section 19 406(b)”). (Doc. 18.) On February 23, 2021, the Court issued a minute order requiring Plaintiff and 20 the Commissioner to file their responses in opposition or statements of non-opposition to Counsel’s 21 motion, if any, by no later than March 24, 2021. (Doc. 19.) Plaintiff and the Commissioner were 22 served with copies of the motion for attorney’s fees and the minute order. (Docs. 18, 20.) 23 On March 22, 2021, the Commissioner filed a response, acknowledging he was not a party 24 to the contingent-fee agreement between Plaintiff and Counsel, and therefore “not in a position to 25 either assent or object to the fees that Counsel seeks from Plaintiff’s past-due benefits,” but 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 nevertheless taking “no position on the reasonableness of the request.” (See Doc. 21 at 2, 4.) 2 Plaintiff did not file any objection to the motion by the March 24, 2021 deadline. (See Docket.) 3 For the reasons set forth below, Counsel’s motion for an award of attorney’s fees is granted 4 in the amount of $28,226.00, subject to an offset of $5,415.15 in fees already awarded pursuant to 5 the Equal Access to Justice Act (“EAJA”), 28 U.S.C. § 2412(d), on March 10, 2020 (see Doc. 17). 6 II. BACKGROUND 7 Plaintiff brought the underlying action seeking judicial review of a final administrative 8 decision denying her claim for disability benefits under the Social Security Act. (Doc. 1.) The 9 Court reversed the Commissioner’s denial of benefits and remanded the case to the agency for 10 further proceedings. (Doc. 14.) Judgment was entered in favor of Plaintiff and against the 11 Commissioner on January 31, 2020. (Doc. 15.) On March 9, 2020, the parties stipulated to an 12 award of $5,415.15 in attorney fees under EAJA, which was entered on March 10, 2020. (Docs. 16, 13 17.) 14 On remand, the Commissioner found Plaintiff disabled as of October 15, 2009. (See Doc. 15 18-3.) On February 7, 2021, the Commissioner issued a letter to Plaintiff approving her claim for 16 benefits and awarding her $112,904.00 in back payments beginning February 2014. (See Doc. 18- 17 4 at 3 (indicating 25% of past due benefits totals $28,226.00).) On February 22, 2021, Counsel filed 18 a motion for attorney’s fees in the amount of $28,226.00, equal to 25% of Plaintiff’s back benefits, 19 with an offset of $5,415.15 for EAJA fees already awarded. (Doc. 18 at 1.) It is Counsel’s section 20 406(b) motion for attorney’s fees that is currently pending before 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. 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 If this matter requires judicial review of any adverse decision of the Social Security Administration, the fee for successful prosecution of this matter is a separate 25% 5 of the past due benefits awarded upon reversal of any unfavorable ALJ decision for work before the court. Attorney shall seek compensation under the Equal 6 Access to Justice Act and such amount shall credit to the client for fees otherwise payable for that particular work. 7 8 (Doc. 18-2 (agreement made on January 26, 2018).) 9 The Court has considered the character of Counsel’s representation of Plaintiff and the good 10 results achieved by Counsel, which included an award of benefits. Counsel spent 30.3 hours 11 representing Plaintiff, ultimately gaining a favorable decision in that the Commissioner’s decision 12 was reversed and remanded to the agency for reconsideration. (Doc. 18 at 3, 19; Doc. 18-5 (time 13 sheets accounting for 26.3 attorney hours and 4.0 paralegal hours spent representing Plaintiff before 14 this Court).) There is no indication that a reduction of the award is warranted due to any substandard 15 performance by Counsel as Counsel secured a successful result for Plaintiff. There is also no 16 evidence that Counsel engaged in any dilatory conduct resulting in delay. 17 Although the accepted range in the Fresno Division for experienced attorneys like Counsel 18 with nearly twenty years of experience (see Doc. 18 at 21) is between $250 and $375 per hour in 19 non-contingency cases, see Silvester v. Harris, No. 1:11–CV–2137 AWI SAB, 2014 WL 7239371 20 at *4 (E.D. Cal. Dec. 17, 2014), here the effective hourly rate requested equals $931.55 per hour. 21 This hourly rate is not excessive when compared to what the Ninth Circuit has approved in cases 22 involving social security contingency fee arrangements. See Thomas v. Colvin, No. 23 1:11−cv−01291−SKO, 2015 WL 1529331, at *2−3 (E.D. Cal. Apr. 3, 2015) (upholding an effective 24 hourly rate of $1,093.22 for 40.8 hours of work); Jamieson v. Astrue, No. 1:09CV0490 LJO DLB, 25 2011 WL 587096, at *2 (E.D. Cal. Feb. 9, 2011) (upholding an effective hourly rate of $1,169.49 26 for 29.5 hours of work); Palos v. Colvin, No. CV 15−04261−DTB, 2016 WL 5110243, at *2 (C.D. 27 Cal. Sept. 20, 2016) (upholding an effective hourly rate of $1,546.39 for 9.7 hours of work); Villa 28 v. Astrue, No. CIV−S−06−0846 GGH, 2010 WL 118454, at *1−2 (E.D. Cal. Jan. 7, 2010) 1 (approving section 406(b) fees exceeding $1,000 per hour for 10.4 hours of work, and noting that 2 “[r]educing § 406(b) fees after Crawford is a dicey business”). Further, attorney’s fees in the amount 3 of $28,226.00 do not exceed 25% of the past-due benefits awarded and are not excessive in relation 4 to the past-due award. See generally Ortega v. Comm’r of Soc. Sec., No. 1:12–cv–01030–AWI– 5 SAB, 2015 WL 5021646, at *3 (E.D. Cal. Aug. 21, 2015) (granting petition for an award of 6 attorney’s fees pursuant to section 406(b) in the amount of $24,350.00); Thomas, 2015 WL 7 1529331, at *3 (granting petition for an award of attorney’s fees pursuant to section 406(b) in the 8 amount of $44,603.50); Jamieson, 2011 WL 587096, at *2 (recommending an award of attorney’s 9 fees pursuant to section 406(b) in the amount of $34,500). 10 In making this determination, the Court recognizes the contingent-fee nature of this case and 11 Counsel’s assumption of risk in agreeing to represent Plaintiff under such terms. “District courts 12 generally have been deferential to the terms of contingency fee contracts in § 406(b) cases.” Hearn 13 v. Barnhart, 262 F. Supp. 2d 1033, 1037 (N.D. Cal. 2003) (“Because attorneys like Mr. Sackett 14 contend with a substantial risk of loss in Title II cases, an effective hourly rate of only $450 in 15 successful cases does not provide a basis for this court to lower the fee to avoid a ‘windfall.’” 16 (quoting Gisbrecht, 535 U.S. at 807)). Attorneys who agree to represent claimants pursuant to a 17 contingent fee agreement assume the risk of receiving no compensation for their time and effort if 18 the action does not succeed. Id. Here, Counsel accepted substantial risk of loss in representing 19 Plaintiff, whose application had already been denied at the administrative level. Plaintiff agreed to 20 the contingent fee. (See Doc. 18-2.) Working efficiently and effectively, Counsel secured a remand, 21 and ultimately, the award of substantial benefits to Plaintiff. (See Docs. 14, 18-3.) 22 An award of attorney’s fees pursuant to section 406(b) in the amount of $28,226.00 is, 23 therefore, appropriate. An award of section 406(b) fees, however, must be offset by any prior award 24 of attorney’s fees granted under the EAJA. 28 U.S.C. § 2412; Gisbrecht, 535 U.S. at 796. As 25 Plaintiff was previously awarded $5,415.15 in fees pursuant to the EAJA, Counsel shall refund this 26 amount to Plaintiff. 27 IV. CONCLUSION AND ORDER 28 For the reasons stated above, the Court concludes that the fees sought by Counsel pursuant 1 to section 406(b) are reasonable. Accordingly, IT IS ORDERED that: 2 1. Counsel’s unopposed motion for an award of attorney’s fees pursuant to 42 U.S.C. § 3 406(b) in the amount of $28,226.00 (Doc. 18) is granted; 4 2. Counsel shall refund to Plaintiff $5,415.15 of the section 406(b) fees awarded as an 5 offset for the EAJA fees previously awarded pursuant to 28 U.S.C. § 2412(d) (Doc. 17); and 6 3. Counsel for Plaintiff shall file on the Court’s docket proof of service of this order 7 upon Plaintiff at her current or last known address. 8 IT IS SO ORDERED. 9
Sheila K. Oberto 10 Dated: April 14, 2021 /s/ . UNITED STATES MAGISTRATE JUDGE 11
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