1 2 3 4 5 6 UNITED STATES DISTRICT COURT 7 EASTERN DISTRICT OF CALIFORNIA 8
9 RENE RAUL MARTINEZ, Case No. 1:14-cv-00385-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. 30) Defendant. / 14 15 I. INTRODUCTION 16 17 On December 17, 2019, counsel for Plaintiff Rene Raul Martinez filed a motion for an award 18 of attorney’s fees pursuant to 42 U.S.C. § 406(b). (Doc. 30.) On December 18, 2019, the Court 19 issued a minute order requiring Plaintiff and the Commissioner to file their responses in opposition 20 or statements of non-opposition to Plaintiff’s counsel’s motion, if any, by no later than January 8, 21 2020. (Doc. 31.) Plaintiff and the Commissioner were served with copies of the motion for 22 attorney’s fees and the minute order. (Docs. 32, 33.) On January 8, 2020, the Commissioner filed 23 a response taking no position on Plaintiff’s motion, noting that “the Commissioner’s role in this 24 matter is one ‘resembling that of a trustee for the claimants’” and providing an “analysis of the fee 25 request.” (Doc. 34.) Plaintiff did not file any objection to the motion by the January 8, 2020
26 1 On June 17, 2019, Andrew Saul became the Commissioner of the Social Security Administration. See https://www.ssa.gov/agency/commissioner.html (last visited by the court on September 13, 2019). He is 27 therefore substituted as the defendant in this action. See 42 U.S.C. § 405(g) (referring to the “Commissioner’s 28 Answer”); 20 C.F.R. § 422.210(d) (“the person holding the Office of the Commissioner shall, in his official 1 deadline and Plaintiff’s counsel did not file a reply. (See Docket.) 2 For the reasons set forth below, Plaintiff’s counsel’s motion for an award of attorney’s fees 3 is granted to the extent that Plaintiff’s counsel is awarded fees under 42 U.S.C. § 406(b) in the 4 amount of $39,330.75, subject to an offset of $8,500 in fees already awarded pursuant to the Equal 5 Access to Justice Act (“EAJA”), 28 U.S.C. § 2412(d), on September 7, 2016, (see Doc. 29).2 6 II. BACKGROUND 7 Plaintiff brought the underlying action seeking judicial review of a final administrative 8 decision denying his claim for disability benefits under the Social Security Act. (Doc. 1.) On 9 August 5, 2015, the Court affirmed the ALJ’s decision to deny benefits. (Doc. 18.) On May 20, 10 2016, the U.S. Court of Appeals for the Ninth Circuit granted the parties’ joint motion to remand 11 and directed the Court to reverse and “remand the case to the Commissioner for further 12 administrative proceedings as set forth in the parties’ stipulation.” (Doc. 24.) On July 6, 2016, 13 pursuant to the Ninth Circuit’s directive, the Court reversed and remanded the case and judgment 14 was entered in favor of Plaintiff and against the Commissioner on the same day. (Docs. 25, 26.) 15 On September 7, 2016, the Court granted Plaintiff’s stipulation for EAJA fees, in the amount of 16 $8,500. (Doc. 29.) 17 On remand, the Commissioner found Plaintiff disabled as of November 13, 2008. (See Doc. 18 30-2 at 13.) On November 26, 2019, the Commissioner issued a letter to Plaintiff approving his 19 claim for benefits and awarding him $157,323 in back payments. (See Doc. 30-3 at 1–2.) On 20 December 17, 2019, counsel filed a motion for attorney’s fees in the amount of $39,330.75, equal 21 to exactly 25% of Plaintiff’s past-due benefits, with an offset of $8,500 for EAJA fees already 22 awarded. (Doc. 30.) It is counsel’s § 406(b) motion for attorney’s fees that is currently pending 23 before the Court. 24 25
26 2 Plaintiff’s counsel requests that the Court award fees “in the amount of $39,330.75 les[s] the amount of the EAJA fees previously awarded in the amount of $8,500.00 for an order of a net fee of $30,830.75 to Law 27 Offices of Lawrence D. Rohlfing.” (Doc. 30 at 3.) This method of awarding fees is not permissible, see 28 Gisbrecht, 535 U.S. at 796, and the Court will instead award the gross amount of $39,330.75 and direct 1 Pursuant to the Social Security Act, attorneys may seek a reasonable fee for cases in which 2 they have successfully represented social security claimants. § 406(b) provides the following: 3 Whenever a court renders a judgment favorable to a claimant under this subchapter 4 who was represented before the court by an attorney, the court may determine and 5 allow as part of its judgment a reasonable fee for such representation, not in excess of 25 percent of the total of the past-due benefits to which the claimant is entitled by 6 reason of such judgment, and the Commissioner of Social Security may . . . certify the amount of such fee for payment to such attorney out of, and not in addition to, 7 the amount of such past-due benefits . . . . 8 42 U.S.C. § 406(b)(1)(A) (emphasis added). “In contrast to fees awarded under fee-shifting 9 provisions such as 42 U.S.C. § 1988, the fee is paid by the claimant out of the past-due benefits 10 awarded; the losing party is not responsible for payment.” Crawford v. Astrue, 586 F.3d 1142, 1147 11 (9th Cir. 2009) (en banc) (citing Gisbrecht v. Barnhart, 535 U.S. 789, 802 (2002)). The 12 Commissioner has standing to challenge the award, despite that the § 406(b) attorney’s fee award is 13 not paid by the government. Craig v. Sec’y Dep’t of Health & Human Servs., 864 F.2d 324, 328 14 (4th Cir. 1989), abrogated on other grounds in Gisbrecht, 535 U.S. at 807. The goal of fee awards 15 under § 406(b) is to provide adequate incentive to represent claimants while ensuring that the usually 16 meager disability benefits received are not greatly depleted. Cotter v. Bowen, 879 F.2d 359, 365 17 (8th Cir. 1989), abrogated on other grounds in Gisbrecht, 535 U.S. at 807.1 18 The 25% maximum fee is not an automatic entitlement, and courts are required to ensure 19 that the requested fee is reasonable. Gisbrecht, 535 U.S. at 808-09 (§ 406(b) does not displace 20 contingent-fee agreements within the statutory ceiling; instead, § 406(b) instructs courts to review 21 for reasonableness fees yielded by those agreements). “Within the 25 percent boundary . . . the 22 attorney for the successful claimant must show that the fee sought is reasonable for the services 23 rendered.” Id. at 807; see also Crawford, 586 F.3d at 1148 (holding that section 406(b) “does not 24 specify how courts should determine whether a requested fee is reasonable” but “provides only that 25 the fee must not exceed 25% of the past-due benefits awarded”). 26 Generally, “a district court charged with determining a reasonable fee award under 27 § 406(b)(1)(A) must respect ‘the primacy of lawful attorney-client fee arrangements,’ . . . ‘looking 28 1 first to the contingent-fee agreement, then testing it for reasonableness.’” Crawford, 586 F.3d at 2 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 RENE RAUL MARTINEZ, Case No. 1:14-cv-00385-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. 30) Defendant. / 14 15 I. INTRODUCTION 16 17 On December 17, 2019, counsel for Plaintiff Rene Raul Martinez filed a motion for an award 18 of attorney’s fees pursuant to 42 U.S.C. § 406(b). (Doc. 30.) On December 18, 2019, the Court 19 issued a minute order requiring Plaintiff and the Commissioner to file their responses in opposition 20 or statements of non-opposition to Plaintiff’s counsel’s motion, if any, by no later than January 8, 21 2020. (Doc. 31.) Plaintiff and the Commissioner were served with copies of the motion for 22 attorney’s fees and the minute order. (Docs. 32, 33.) On January 8, 2020, the Commissioner filed 23 a response taking no position on Plaintiff’s motion, noting that “the Commissioner’s role in this 24 matter is one ‘resembling that of a trustee for the claimants’” and providing an “analysis of the fee 25 request.” (Doc. 34.) Plaintiff did not file any objection to the motion by the January 8, 2020
26 1 On June 17, 2019, Andrew Saul became the Commissioner of the Social Security Administration. See https://www.ssa.gov/agency/commissioner.html (last visited by the court on September 13, 2019). He is 27 therefore substituted as the defendant in this action. See 42 U.S.C. § 405(g) (referring to the “Commissioner’s 28 Answer”); 20 C.F.R. § 422.210(d) (“the person holding the Office of the Commissioner shall, in his official 1 deadline and Plaintiff’s counsel did not file a reply. (See Docket.) 2 For the reasons set forth below, Plaintiff’s counsel’s motion for an award of attorney’s fees 3 is granted to the extent that Plaintiff’s counsel is awarded fees under 42 U.S.C. § 406(b) in the 4 amount of $39,330.75, subject to an offset of $8,500 in fees already awarded pursuant to the Equal 5 Access to Justice Act (“EAJA”), 28 U.S.C. § 2412(d), on September 7, 2016, (see Doc. 29).2 6 II. BACKGROUND 7 Plaintiff brought the underlying action seeking judicial review of a final administrative 8 decision denying his claim for disability benefits under the Social Security Act. (Doc. 1.) On 9 August 5, 2015, the Court affirmed the ALJ’s decision to deny benefits. (Doc. 18.) On May 20, 10 2016, the U.S. Court of Appeals for the Ninth Circuit granted the parties’ joint motion to remand 11 and directed the Court to reverse and “remand the case to the Commissioner for further 12 administrative proceedings as set forth in the parties’ stipulation.” (Doc. 24.) On July 6, 2016, 13 pursuant to the Ninth Circuit’s directive, the Court reversed and remanded the case and judgment 14 was entered in favor of Plaintiff and against the Commissioner on the same day. (Docs. 25, 26.) 15 On September 7, 2016, the Court granted Plaintiff’s stipulation for EAJA fees, in the amount of 16 $8,500. (Doc. 29.) 17 On remand, the Commissioner found Plaintiff disabled as of November 13, 2008. (See Doc. 18 30-2 at 13.) On November 26, 2019, the Commissioner issued a letter to Plaintiff approving his 19 claim for benefits and awarding him $157,323 in back payments. (See Doc. 30-3 at 1–2.) On 20 December 17, 2019, counsel filed a motion for attorney’s fees in the amount of $39,330.75, equal 21 to exactly 25% of Plaintiff’s past-due benefits, with an offset of $8,500 for EAJA fees already 22 awarded. (Doc. 30.) It is counsel’s § 406(b) motion for attorney’s fees that is currently pending 23 before the Court. 24 25
26 2 Plaintiff’s counsel requests that the Court award fees “in the amount of $39,330.75 les[s] the amount of the EAJA fees previously awarded in the amount of $8,500.00 for an order of a net fee of $30,830.75 to Law 27 Offices of Lawrence D. Rohlfing.” (Doc. 30 at 3.) This method of awarding fees is not permissible, see 28 Gisbrecht, 535 U.S. at 796, and the Court will instead award the gross amount of $39,330.75 and direct 1 Pursuant to the Social Security Act, attorneys may seek a reasonable fee for cases in which 2 they have successfully represented social security claimants. § 406(b) provides the following: 3 Whenever a court renders a judgment favorable to a claimant under this subchapter 4 who was represented before the court by an attorney, the court may determine and 5 allow as part of its judgment a reasonable fee for such representation, not in excess of 25 percent of the total of the past-due benefits to which the claimant is entitled by 6 reason of such judgment, and the Commissioner of Social Security may . . . certify the amount of such fee for payment to such attorney out of, and not in addition to, 7 the amount of such past-due benefits . . . . 8 42 U.S.C. § 406(b)(1)(A) (emphasis added). “In contrast to fees awarded under fee-shifting 9 provisions such as 42 U.S.C. § 1988, the fee is paid by the claimant out of the past-due benefits 10 awarded; the losing party is not responsible for payment.” Crawford v. Astrue, 586 F.3d 1142, 1147 11 (9th Cir. 2009) (en banc) (citing Gisbrecht v. Barnhart, 535 U.S. 789, 802 (2002)). The 12 Commissioner has standing to challenge the award, despite that the § 406(b) attorney’s fee award is 13 not paid by the government. Craig v. Sec’y Dep’t of Health & Human Servs., 864 F.2d 324, 328 14 (4th Cir. 1989), abrogated on other grounds in Gisbrecht, 535 U.S. at 807. The goal of fee awards 15 under § 406(b) is to provide adequate incentive to represent claimants while ensuring that the usually 16 meager disability benefits received are not greatly depleted. Cotter v. Bowen, 879 F.2d 359, 365 17 (8th Cir. 1989), abrogated on other grounds in Gisbrecht, 535 U.S. at 807.1 18 The 25% maximum fee is not an automatic entitlement, and courts are required to ensure 19 that the requested fee is reasonable. Gisbrecht, 535 U.S. at 808-09 (§ 406(b) does not displace 20 contingent-fee agreements within the statutory ceiling; instead, § 406(b) instructs courts to review 21 for reasonableness fees yielded by those agreements). “Within the 25 percent boundary . . . the 22 attorney for the successful claimant must show that the fee sought is reasonable for the services 23 rendered.” Id. at 807; see also Crawford, 586 F.3d at 1148 (holding that section 406(b) “does not 24 specify how courts should determine whether a requested fee is reasonable” but “provides only that 25 the fee must not exceed 25% of the past-due benefits awarded”). 26 Generally, “a district court charged with determining a reasonable fee award under 27 § 406(b)(1)(A) must respect ‘the primacy of lawful attorney-client fee arrangements,’ . . . ‘looking 28 1 first to the contingent-fee agreement, then testing it for reasonableness.’” Crawford, 586 F.3d at 2 1148 (quoting Gisbrecht, 535 U.S. at 793, 808). The United States Supreme Court has identified 3 several factors that may be considered in determining whether a fee award under a contingent-fee 4 agreement is unreasonable and therefore subject to reduction by the court: (1) the character of the 5 representation; (2) the results achieved by the representative; (3) whether the attorney engaged in 6 dilatory conduct in order to increase the accrued amount of past-due benefits; (4) whether the 7 benefits are large in comparison to the amount of time counsel spent on the case; and (5) the 8 attorney’s record of hours worked and counsel’s regular hourly billing charge for non-contingent 9 cases. Id. (citing Gisbrecht, 535 U.S. at 807–08). 10 Here, the fee agreement between Plaintiff and counsel, signed by Plaintiff and his counsel, 11 attorney Lawrence D. Rohlfing, provides, in relevant part: 12 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% 13 of the past due benefits awarded upon reversal of any unfavorable ALJ decision for work before the court. 14 15 (Doc. 30-1 (signed June 9, 2016).) 16 The Court has considered the character of counsel’s representation of Plaintiff and the good 17 results achieved by counsel, which included an award of benefits. As Plaintiff’s counsel, attorney 18 Lawrence D. Rohlfing spent 42.1 hours representing Plaintiff, ultimately gaining a favorable 19 decision in that the Court remanded the case to the Commissioner for further proceedings. (Doc. 20 30 at 3; Doc. 30-4 (time sheets accounting for 42.1 attorney hours spent representing Plaintiff before 21 this Court).)3 There is no indication that a reduction of the award is warranted due to any 22 substandard performance by Plaintiff’s counsel as counsel secured a successful result for Plaintiff. 23 There is also no evidence that counsel engaged in any dilatory conduct resulting in delay. 24 The effective hourly rate requested by Plaintiff’s counsel here equals approximately $934 25 per hour. This hourly rate is not excessive when compared to what the Ninth Circuit has approved
26 3 Plaintiff’s counsel represents in the motion that he spent “48.8 hours before the District Court,” but this appears to be a typographical error because the time sheets attached to the motion reflect that 42.1 hours were 27 spent in total. (Compare Doc. 30 at 3 with Doc. 30-4.) In any event, the Court finds counsel’s requested 28 hourly rate reasonable using either 48.8 hours or 42.1 hours as the total time spent on the case, and thus the 1 in cases involving social security contingency fee arrangements. See Crawford, 586 F.3d 1142, 2 1153 (9th Cir. 2009) (explaining that the majority opinion found reasonable effective hourly rates 3 equaling $519, $875, and $902) (J. Clifton, concurring in part and dissenting in part); see also 4 Thomas v. Colvin, No. 1:11−cv−01291−SKO, 2015 WL 1529331, at *2−3 (E.D. Cal. Apr. 3, 2015) 5 (upholding an effective hourly rate of $1,093.22 for 40.8 hours of work); Jamieson v. Astrue, No. 6 1:09CV0490 LJO DLB, 2011 WL 587096, at *2 (E.D. Cal. Feb. 9, 2011) (upholding an effective 7 hourly rate of $1,169.49 for 29.5 hours of work); Palos v. Colvin, No. CV 15−04261−DTB, 2016 8 WL 5110243, at *2 (C.D. Cal. Sept. 20, 2016) (upholding an effective hourly rate of $1,546.39 for 9 9.7 hours of work); Villa v. Astrue, No. CIV−S−06−0846 GGH, 2010 WL 118454, at *1−2 (E.D. 10 Cal. Jan. 7, 2010) (approving § 406(b) fees exceeding $1,000 per hour for 10.4 hours of work, and 11 noting that “[r]educing § 406(b) fees after Crawford is a dicey business”). 12 Further, attorney’s fees in the amount of $39,330.75 do not exceed 25% of the past-due 13 benefits awarded and are not excessive in relation to the past-due award. See generally Ortega v. 14 Comm’r of Soc. Sec., No. 1:12–cv–01030–AWI–SAB, 2015 WL 5021646, at *3 (E.D. Cal. Aug. 15 21, 2015) (granting petition for an award of attorney’s fees pursuant to § 406(b) in the amount of 16 $24,350.00); Thomas, 2015 WL 1529331, at *3 (granting petition for an award of attorney’s fees 17 pursuant to § 406(b) in the amount of $44,603.50); Boyle v. Colvin, No. 1:12–cv–00954–SMS, 2013 18 WL 6712552, at *2 (E.D. Cal. Dec. 19, 2013) (granting petition for an award of attorney’s fees 19 pursuant to § 406(b) in the amount of $20,577.57); Jamieson, 2011 WL 587096, at *2 20 (recommending an award of attorney’s fees pursuant to § 406(b) in the amount of $34,500). 21 In making this determination, the Court recognizes the contingent-fee nature of this case and 22 counsel’s assumption of risk in agreeing to represent Plaintiff under such terms. “District courts 23 generally have been deferential to the terms of contingency fee contracts in § 406(b) cases.” Hearn 24 v. Barnhart, 262 F. Supp. 2d 1033, 1037 (N.D. Cal. 2003) (“Because attorneys like Mr. Sackett 25 contend with a substantial risk of loss in Title II cases, an effective hourly rate of only $450 in 26 successful cases does not provide a basis for this court to lower the fee to avoid a ‘windfall.’” 27 (quoting Gisbrecht, 535 U.S. at 807)). Attorneys who agree to represent claimants pursuant to a 28 contingent fee agreement assume the risk of receiving no compensation for their time and effort if 1 the action does not succeed. Id. Here, Plaintiff’s attorney accepted substantial risk of loss in 2 representing Plaintiff, whose application had already been denied at the administrative level. 3 Plaintiff agreed to the contingent fee. (See Doc. 30-1.) Working efficiently and effectively, the 4 attorney secured a reversal and remand, and ultimately, the award of substantial benefits to Plaintiff. 5 (See Docs. 25, 26, 30-3.) 6 An award of attorney’s fees pursuant to § 406(b) in the amount of $39,330.75 is, therefore, 7 appropriate. An award of § 406(b) fees, however, must be offset by any prior award of attorney’s 8 fees granted under the EAJA. 28 U.S.C. § 2412; Gisbrecht, 535 U.S. at 796. Plaintiff was 9 previously awarded $8,500 in fees pursuant to the EAJA; as such, counsel shall refund such amount 10 to Plaintiff. 11 IV. CONCLUSION AND ORDER 12 For the reasons stated above, the Court concludes that the fees sought by Plaintiff’s counsel 13 pursuant to § 406(b) are reasonable. Accordingly, IT IS ORDERED that: 14 1. Plaintiff’s counsel’s unopposed motion for an award of attorney’s fees pursuant to 15 42 U.S.C. § 406(b) in the amount of $39,330.75, (Doc. 30), is granted to the extent that the gross 16 amount is awarded to Plaintiff’s counsel and Plaintiff’s counsel shall refund to Plaintiff EAJA fees 17 as set forth below; 18 2. Plaintiff’s counsel shall refund to Plaintiff $8,500 of the § 406(b) fees awarded as an 19 offset for the EAJA fees previously awarded pursuant to 28 U.S.C. § 2412(d), (see Doc. 29); and 20 3. Counsel for Plaintiff shall file on the Court’s docket proof of service of this order 21 upon Plaintiff at his current or last known address.
IT IS SO ORDERED. 23
Sheila K. Oberto 24 Dated: January 17, 2020 /s/ . 25 UNITED STATES MAGISTRATE JUDGE