(SS) Malloy v. Commissioner of Social Security

• Court: District Court, E.D. California
• Decided: June 27, 2024
• Docket: 2:20-cv-00618
• Status: Unknown

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 JAMES M. MALLOY, No. 2:20-cv-0618 DB 12 Plaintiff, 13 v. ORDER 14 MARTIN O’MALLEY, Commissioner of Social Security,1 15 16 Defendant. 17 18 Plaintiff brought this action seeking judicial review of a final administrative decision 19 denying an application for Disability Insurance Benefits (“DIB”) under Title II of the Social 20 Security Act.2 On February 21, 2023, the court granted plaintiff’s motion for summary judgment 21 and remanded this matter for further proceedings. (ECF No. 19.) 22 //// 23 1 Martin O’Malley became the Commissioner of the Social Security Administration on December 24 20, 2023. See https://blog.ssa.gov/martin-j-omalley-sworn-in-as-commissioner-of-social- security-administration/ (last visited by the court on February 21, 2024). Accordingly, Martin 25 O’Malley is substituted in as the defendant in this action. See 42 U.S.C. § 405(g) (referring to the “Commissioner’s Answer”); 20 C.F.R. § 422.210(d) (“the person holding the Office of the 26 Commissioner shall, in his official capacity, be the proper defendant”). 27 2 Both parties have previously consented to Magistrate Judge jurisdiction over this action 28 pursuant to 28 U.S.C. § 636(c). (See ECF No. 18.) 1 Upon remand plaintiff was awarded current and retroactive benefits. (ECF No. 24-1 at 1.) 2 On April 28, 2024, counsel for plaintiff filed a motion for an award of attorney’s fees pursuant to 3 42 U.S.C. § 406(b) as provided for by the applicable contingent-fee agreement. (ECF No. 24.) 4 Pursuant to that agreement plaintiff’s counsel now seeks attorney’s fees in the amount of $32,500, 5 which represents far less than 25% of the retroactive disability benefits received by plaintiff on 6 remand.3 (ECF No. 24-1 at 1.) Defendant “neither supports nor opposes” the fee request. (ECF 7 No. 25 at 2.) 8 Attorneys are entitled to fees for cases in which they have successfully represented social 9 security claimants. 10 Whenever a court renders a judgment favorable to a claimant under this subchapter who was represented before the court by an attorney, 11 the court may determine and allow as part of its judgment a reasonable fee for such representation, not in excess of 25 percent of 12 the total of the past-due benefits to which the claimant is entitled by reason of such judgment, and the Commissioner of Social Security 13 may . . . certify the amount of such fee for payment to such attorney out of, and not in addition to, the amount of such past-due benefits. 14 15 42 U.S.C. § 406(b)(1)(A). “In contrast to fees awarded under fee-shifting provisions such as 42 16 U.S.C. § 1988, the fee is paid by the claimant out of the past-due benefits awarded; the losing 17 party is not responsible for payment.” Crawford v. Astrue, 586 F.3d 1142, 1147 (9th Cir. 2009) 18 (en banc) (citing Gisbrecht v. Barnhart, 535 U.S. 789, 802 (2002)). Although an attorney fee 19 award pursuant to 42 U.S.C. § 406(b) is not paid by the government, the Commissioner has 20 standing to challenge the award. Craig v. Sec’y Dep’t of Health & Human Servs., 864 F.2d 324, 21 328 (4th Cir. 1989), abrogated on other grounds in Gisbrecht, 535 U.S. at 807. The goal of fee 22 awards under § 406(b) is to provide adequate incentive to attorneys for representing claimants 23 while ensuring that the usually meager disability benefits received are not greatly depleted. 24 Cotter v. Bowen, 879 F.2d 359, 365 (8th Cir. 1989). 25 //// 26

27 3 In a Notice of Change of Benefits to plaintiff, the Commissioner advised plaintiff that $52,111.50 was being withheld from plaintiff’s award as that amount represented “25 percent of 28 past due benefits[.]” (ECF No. 24-1 at 2.) 1 The 25% statutory maximum fee is not an automatic entitlement, and the court must 2 ensure that the fee actually requested is reasonable. Gisbrecht, 535 U.S. at 808-09 (“[Section] 3 406(b) does not displace contingent-fee agreements within the statutory ceiling; instead, § 406(b) 4 instructs courts to review for reasonableness fees yielded by those agreements.”). “Within the 25 5 percent boundary . . . the attorney for the successful claimant must show that the fee sought is 6 reasonable for the services rendered.” Id. at 807. “[A] district court charged with determining a 7 reasonable fee award under § 406(b)(1)(A) must respect ‘the primacy of lawful attorney-client fee 8 arrangements,’ ‘looking first to the contingent-fee agreement, then testing it for reasonableness.’” 9 Crawford, 586 F.3d at 1149 (quoting Gisbrecht, 535 U.S. at 793 & 808). 10 The Supreme Court has identified five factors that may be considered in determining 11 whether a fee award under a contingent-fee arrangement is unreasonable and therefore subject to 12 reduction by the court: (1) the character of the representation; (2) the results achieved by the 13 representative; (3) whether the attorney engaged in dilatory conduct in order to increase the 14 accrued amount of past-due benefits; (4) whether the benefits are large in comparison to the 15 amount of time counsel spent on the case; and (5) the attorney’s record of hours worked and 16 counsel’s regular hourly billing charge for noncontingent cases. Crawford, 586 F.3d at 1151-52 17 (citing Gisbrecht, 535 U.S. at 808). Below, the court will consider these factors in assessing 18 whether the fee requested by counsel in this case pursuant to 42 U.S.C. § 406(b) is reasonable. 19 Here, there is no indication that a reduction of fees is warranted due to any substandard 20 performance by counsel. Rather, plaintiff’s counsel is an experienced attorney who secured a 21 successful result for plaintiff. There is also no evidence that plaintiff’s counsel engaged in any 22 dilatory conduct resulting in excessive delay. 23 The court finds that the $32,500 fee sought based on 34.75 hours of attorney time is not 24 excessive in relation to the benefits awarded. (ECF No. 24 at 8.) In making this determination, 25 the court recognizes the contingent fee nature of this case and counsel’s assumption of the risk of 26 going uncompensated in agreeing to represent plaintiff on such terms. See Hearn v. Barnhart, 27 262 F. Supp.2d 1033, 1037 (N.D. Cal. 2003). 28 //// 1 Accordingly, for the reasons stated above, the court concludes that the fees sought by 2 | counsel pursuant to § 406(b) are reasonable. See generally JAIME C., Plaintiff, v. ANDREW M. 3 | SAUL, Defendant, Case No. 20-cv-3760 JSC, 2022 WL 4295279, at *2 (N.D. Cal. Sept. 16, 4 | 2022) (awarding $55,387.13 in attorney’s fees pursuant to 406(b)); Martinez v. Commissioner of 5 | Social Security, Case No. 1:18-cv-0940 BAM, 2022 WL 3358104, at *3 (E.D. Cal. Aug. 15, 6 | 2022) (awarding $42,651.13 in attorney’s fees pursuant to 406(b)); Jamieson v. Astrue, No. 7 1:09cv0490 LJO DLB, 2011 WL 587096, at *2 (E.D. Cal. Feb. 9, 2011) (recommending award of 8 | $34,500 in attorney fees pursuant to 406(b)). 9 An award of § 406(b) fees is, however, normally offset by any prior award of attorney’s 10 | fees granted under the Equal Access to Justice Act (“EAJA”). 28 U.S.C. § 2412; Gisbrecht, 535 11 | U.S. at 796. Here, plaintiffs counsel was previously awarded $7,500 in EAJA fees and the award 12 | under § 406(b) must be offset by that amount. (ECF No. 23.) 13 Accordingly, IT IS HEREBY ORDERED that: 14 1. Plaintiff's April 28, 2024 motion for attorney fees under 42 U.S.C. § 406(b), (ECF No. 15 24), is granted; 16 2. Counsel for plaintiff is awarded $32,500 in attorney fees under § 406(b). The 17 | Commissioner is directed to pay the fee forthwith and remit to plaintiff the remainder any 18 || withheld benefits; and 19 3. Upon receipt of the $32,500 in attorney fees pursuant to § 406(b), counsel shall 20 | reimburse plaintiff in the amount of $7,500 previously paid by the government under the EAJA. 21 | Dated: June 26, 2024 22 23 A ORAH BARNES UNITED STATES MAGISTRATE JUDGE 25 26 27 DLB:6 28 DB\orders\orders.soc sec\malloy0618.406(b).ord