1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 EDITH LILLIAN SISCO, No. 1:19-cv-01277-ADA-SKO (SS) 12 Plaintiff, ORDER GRANTING PLAINTIFF’S COUNSEL’S MOTION FOR ATTORNEY’S 13 v. FEES PURUSANT TO 42 U.S.C. § 406(b) 14 KILOLO KIJAKAZI, Acting (ECF No. 27) Commissioner of Social Security, 15 Defendant. 16
17 18 I. 19 PROCEDURAL BACKGROUND 20 On September 10, 2019, Plaintiff Edith Lillian Sisco (“Plaintiff”) filed this action seeking 21 review of a final decision of Defendant Kilolo Kijakazi, Acting Commissioner of Social Security. 22 (ECF No. 1.) The Court remanded the matter on July 10, 2020, for further administrative 23 proceedings pursuant to sentence four of 42 U.S.C. § 405(g). (ECF No. 22.) 24 On September 8, 2020, the Court approved the parties’ stipulation to award attorney’s fees 25 in the amount of $7,344.00 under the Equal Access to Justice Act (“EAJA”), 28 U.S.C. § 2412(d). 26 (ECF No. 26.) On July 14, 2023, Plaintiff’s counsel David F. Chermol (“Counsel”) filed the instant 27 motion for attorney’s fees pursuant to 42 U.S.C. § 406(b) of the Social Security Act (“SSA”), in 28 the amount of $2,891.00. (ECF No. 27.) Plaintiff and Counsel entered into a contingent fee 1 agreement, where Plaintiff’s counsel may recover up to 25% of any past due Social Security 2 benefits awarded. (ECF No. 27-2 at 1-2.) 25% of Plaintiff’s past due benefits of $40,940.00 is 3 $10,235.00. (ECF No. 27 at 2.) An EAJA refund of $7,344.00 reduces the amount of section 4 406(b) attorney’s fees from $10,235.00 to $2,891.00. (Id.) 5 On July 31, 2023, Defendant filed a response agreeing that if the Court awards section 6 406(b) attorney’s fees, Counsel must refund to Plaintiff the $7,344.00 in fees this Court previously 7 awarded under the EAJA resulting in a net payment of $2,891.00. (ECF No. 31.) 8 II. 9 LEGAL STANDARD 10 Pursuant to the SSA, attorneys may seek a reasonable fee for cases in which they have 11 successfully represented social security claimants. Section 406(b) provides the following:
12 Whenever a court renders a judgment favorable to a claimant under this 13 subchapter 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 14 representation, not in excess 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 15 of Social Security 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 . . . . 16 17 42 U.S.C. § 406(b)(1)(A) (emphasis added). “In contrast to fees awarded under fee-shifting 18 provisions such as 42 U.S.C. § 1988, the fee is paid by the claimant out of the past-due benefits 19 awarded; the losing party is not responsible for payment.” Crawford v. Astrue, 586 F.3d 1142, 20 1147 (9th Cir. 2009) (en banc) (citing Gisbrecht v. Barnhart, 535 U.S. 789, 802 (2002)). The 21 Acting Commissioner has standing to challenge the award, even though the government does not 22 pay the section 406(b) attorney’s fee award. Craig v. Sec’y Dep’t of Health & Human Servs., 864 23 F.2d 324, 328 (4th Cir. 1989), abrogated on other grounds in Gisbrecht, 535 U.S. at 807. The goal 24 of fee awards under section 406(b) is to provide adequate incentive to represent claimants while 25 ensuring that the usually meager disability benefits received are not greatly depleted. Cotter v. 26 Bowen, 879 F.2d 359, 365 (8th Cir. 1989), abrogated on other grounds in Gisbrecht, 535 U.S. at 27 807. 28 The 25% maximum fee is not an automatic entitlement, and courts are required to ensure 1 that the requested fee is reasonable. Gisbrecht, 535 U.S. at 808-09 (holding that section 406(b) 2 does not displace contingent-fee agreements within the statutory ceiling; instead, section 406(b) 3 instructs courts to review for reasonableness fees yielded by those agreements). “Within the 25 4 percent boundary . . . the attorney for the successful claimant must show that the fee sought is 5 reasonable for the services rendered.” Id. at 807; see also Crawford, 586 F.3d at 1148 (holding 6 that section 406(b) “does not specify how courts should determine whether a requested fee is 7 reasonable” but “provides only that the fee must not exceed 25% of the past-due benefits awarded”). 8 Generally, “a district court charged with determining a reasonable fee award under § 9 406(b)(1)(A) must respect ‘the primacy of lawful attorney-client fee arrangements,’ . . . ‘looking 10 first to the contingent-fee agreement, then testing it for reasonableness.’” Crawford, 586 F.3d at 11 1148 (quoting Gisbrecht, 535 U.S. at 793, 808). The U.S. Supreme Court has identified several 12 factors that may be considered in determining whether a fee award under a contingent-fee 13 agreement is unreasonable and therefore subject to reduction by the Court: (1) the character of the 14 representation; (2) the results achieved by the representative; (3) whether the attorney engaged in 15 dilatory conduct in order to increase the accrued amount of past-due benefits; (4) whether the 16 benefits are large in comparison to the amount of time counsel spent on the case; and (5) the 17 attorney’s record of hours worked and counsel’s regular hourly billing charge for non-contingent 18 cases. Id. (citing Gisbrecht, 535 U.S. at 807-08). 19 III. 20 DISCUSSION 21 Here, the fee agreement between Plaintiff and Counsel, signed by both parties, provides in 22 pertinent part: 23 I agree that if my claim(s) is approved at any stage prior to the case ever reaching 24 the Appeals Council, I will pay my representative a fee equal to the lesser of 25 twenty-five percent (25%) of all past due benefits or Six Thousand dollars ($6,000.00) awarded on my account as a result of my claim(s), except that the 26 maximum fee may increase at the time and to the extent that the Social Security Administration (SSA) shall determine as provided by law. If my claim(s) is 27 favorably decided after an appeal to the Appeals Council, I will pay the firm/my representative a fee equal to twenty five percent (25%) of all past due benefits 28 1 which are awarded on my account, regardless of whether that amount exceeds Six Thousand dollars ($6,000.00). 2
If my claim ever reaches the Appeals Council level, the firm/my representative 3 is entitled in such circumstances to pursue the 25% of all past due benefits 4 through the fee petition process and/or 42 U.S.C. § 406(b) (or any combination thereof). The 25% figure shall be based on the total amount of past-due benefits, 5 before payment to any other person or agency, including but not limited to the Department of Social Services, the Social Security Administration, any child 6 support enforcement authority, state or federal tax agencies, or any person 7 claiming under a right to child or spousal support.
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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 EDITH LILLIAN SISCO, No. 1:19-cv-01277-ADA-SKO (SS) 12 Plaintiff, ORDER GRANTING PLAINTIFF’S COUNSEL’S MOTION FOR ATTORNEY’S 13 v. FEES PURUSANT TO 42 U.S.C. § 406(b) 14 KILOLO KIJAKAZI, Acting (ECF No. 27) Commissioner of Social Security, 15 Defendant. 16
17 18 I. 19 PROCEDURAL BACKGROUND 20 On September 10, 2019, Plaintiff Edith Lillian Sisco (“Plaintiff”) filed this action seeking 21 review of a final decision of Defendant Kilolo Kijakazi, Acting Commissioner of Social Security. 22 (ECF No. 1.) The Court remanded the matter on July 10, 2020, for further administrative 23 proceedings pursuant to sentence four of 42 U.S.C. § 405(g). (ECF No. 22.) 24 On September 8, 2020, the Court approved the parties’ stipulation to award attorney’s fees 25 in the amount of $7,344.00 under the Equal Access to Justice Act (“EAJA”), 28 U.S.C. § 2412(d). 26 (ECF No. 26.) On July 14, 2023, Plaintiff’s counsel David F. Chermol (“Counsel”) filed the instant 27 motion for attorney’s fees pursuant to 42 U.S.C. § 406(b) of the Social Security Act (“SSA”), in 28 the amount of $2,891.00. (ECF No. 27.) Plaintiff and Counsel entered into a contingent fee 1 agreement, where Plaintiff’s counsel may recover up to 25% of any past due Social Security 2 benefits awarded. (ECF No. 27-2 at 1-2.) 25% of Plaintiff’s past due benefits of $40,940.00 is 3 $10,235.00. (ECF No. 27 at 2.) An EAJA refund of $7,344.00 reduces the amount of section 4 406(b) attorney’s fees from $10,235.00 to $2,891.00. (Id.) 5 On July 31, 2023, Defendant filed a response agreeing that if the Court awards section 6 406(b) attorney’s fees, Counsel must refund to Plaintiff the $7,344.00 in fees this Court previously 7 awarded under the EAJA resulting in a net payment of $2,891.00. (ECF No. 31.) 8 II. 9 LEGAL STANDARD 10 Pursuant to the SSA, attorneys may seek a reasonable fee for cases in which they have 11 successfully represented social security claimants. Section 406(b) provides the following:
12 Whenever a court renders a judgment favorable to a claimant under this 13 subchapter 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 14 representation, not in excess 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 15 of Social Security 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 . . . . 16 17 42 U.S.C. § 406(b)(1)(A) (emphasis added). “In contrast to fees awarded under fee-shifting 18 provisions such as 42 U.S.C. § 1988, the fee is paid by the claimant out of the past-due benefits 19 awarded; the losing party is not responsible for payment.” Crawford v. Astrue, 586 F.3d 1142, 20 1147 (9th Cir. 2009) (en banc) (citing Gisbrecht v. Barnhart, 535 U.S. 789, 802 (2002)). The 21 Acting Commissioner has standing to challenge the award, even though the government does not 22 pay the section 406(b) attorney’s fee award. Craig v. Sec’y Dep’t of Health & Human Servs., 864 23 F.2d 324, 328 (4th Cir. 1989), abrogated on other grounds in Gisbrecht, 535 U.S. at 807. The goal 24 of fee awards under section 406(b) is to provide adequate incentive to represent claimants while 25 ensuring that the usually meager disability benefits received are not greatly depleted. Cotter v. 26 Bowen, 879 F.2d 359, 365 (8th Cir. 1989), abrogated on other grounds in Gisbrecht, 535 U.S. at 27 807. 28 The 25% maximum fee is not an automatic entitlement, and courts are required to ensure 1 that the requested fee is reasonable. Gisbrecht, 535 U.S. at 808-09 (holding that section 406(b) 2 does not displace contingent-fee agreements within the statutory ceiling; instead, section 406(b) 3 instructs courts to review for reasonableness fees yielded by those agreements). “Within the 25 4 percent boundary . . . the attorney for the successful claimant must show that the fee sought is 5 reasonable for the services rendered.” Id. at 807; see also Crawford, 586 F.3d at 1148 (holding 6 that section 406(b) “does not specify how courts should determine whether a requested fee is 7 reasonable” but “provides only that the fee must not exceed 25% of the past-due benefits awarded”). 8 Generally, “a district court charged with determining a reasonable fee award under § 9 406(b)(1)(A) must respect ‘the primacy of lawful attorney-client fee arrangements,’ . . . ‘looking 10 first to the contingent-fee agreement, then testing it for reasonableness.’” Crawford, 586 F.3d at 11 1148 (quoting Gisbrecht, 535 U.S. at 793, 808). The U.S. Supreme Court has identified several 12 factors that may be considered in determining whether a fee award under a contingent-fee 13 agreement is unreasonable and therefore subject to reduction by the Court: (1) the character of the 14 representation; (2) the results achieved by the representative; (3) whether the attorney engaged in 15 dilatory conduct in order to increase the accrued amount of past-due benefits; (4) whether the 16 benefits are large in comparison to the amount of time counsel spent on the case; and (5) the 17 attorney’s record of hours worked and counsel’s regular hourly billing charge for non-contingent 18 cases. Id. (citing Gisbrecht, 535 U.S. at 807-08). 19 III. 20 DISCUSSION 21 Here, the fee agreement between Plaintiff and Counsel, signed by both parties, provides in 22 pertinent part: 23 I agree that if my claim(s) is approved at any stage prior to the case ever reaching 24 the Appeals Council, I will pay my representative a fee equal to the lesser of 25 twenty-five percent (25%) of all past due benefits or Six Thousand dollars ($6,000.00) awarded on my account as a result of my claim(s), except that the 26 maximum fee may increase at the time and to the extent that the Social Security Administration (SSA) shall determine as provided by law. If my claim(s) is 27 favorably decided after an appeal to the Appeals Council, I will pay the firm/my representative a fee equal to twenty five percent (25%) of all past due benefits 28 1 which are awarded on my account, regardless of whether that amount exceeds Six Thousand dollars ($6,000.00). 2
If my claim ever reaches the Appeals Council level, the firm/my representative 3 is entitled in such circumstances to pursue the 25% of all past due benefits 4 through the fee petition process and/or 42 U.S.C. § 406(b) (or any combination thereof). The 25% figure shall be based on the total amount of past-due benefits, 5 before payment to any other person or agency, including but not limited to the Department of Social Services, the Social Security Administration, any child 6 support enforcement authority, state or federal tax agencies, or any person 7 claiming under a right to child or spousal support. I understand that the 25% of fees described above does not include expenses or costs. The term “my account” 8 used above includes not only myself but also any auxiliary beneficiaries under my account. 9 10 (ECF No. 27-2 at 1-2.) 11 The Court has considered the character of Counsel’s representation of Plaintiff and the good 12 results achieved by Counsel, which included an award of benefits. Counsel spent 42.0 hours 13 representing Plaintiff, ultimately gaining a favorable decision in that the Acting Commissioner’s 14 decision was reversed and remanded to the agency for reconsideration. (ECF No. 27-3 at 3-4.) 15 There is no indication that a reduction of the award is warranted due to any substandard 16 performance by Counsel, as Counsel secured a successful result for Plaintiff. There is also no 17 evidence that Counsel engaged in dilatory conduct resulting in delay. 18 The accepted fee range in the Fresno Division in non-contingency fee cases is between $475 19 and $575 per hour for associates and $675 and $750 per hour for senior counsel and partners. See 20 Mathein v. Pier 1 Imports (U.S.), Inc., No. 1:16-CV-00087-DAD-SAB, 2018 WL 1993727, at *11 21 (E.D. Cal. Apr. 27, 2018); see also Emmons v. Quest Diagnostics Clinical Labs., Inc., No. 1:13- 22 CV-00474-DADBAM, 2017 WL 749018, at *8 (E.D. Cal. Feb. 27, 2017) (accepting hourly rates 23 between $330 and $550 for associates, and $500 and $720 for partners). 24 Here, the effective hourly rate requested, $204.00, does not exceed this range. (See ECF 25 No. 27-3 at 4.) This hourly rate is also not excessive when compared to what the Ninth Circuit has 26 approved in cases involving social security contingency fee arrangements. See Crawford, 586 F.3d 27 1142, 1153 (9th Cir. 2009) (explaining that the majority opinion found reasonable effective hourly 28 rates equaling $519, $875, and $902) (J. Clifton, concurring in part and dissenting in part); see also 1 Thomas v. Colvin, No. 1:11-cv-01291-SKO, 2015 WL 1529331, at *2-3 (E.D. Cal. Apr. 3, 2015) 2 (upholding an effective hourly rate of $1,093.22 for 40.8 hours of work); Jamieson v. Astrue, No. 3 1:09-cv-0490-LJO-DLB, 2011 WL 587096, at *2 (E.D. Cal. Feb. 9, 2011) (upholding an effective 4 hourly rate of $1,169.49 for 29.5 hours of work); Palos v. Colvin, No. CV 15-04261-DTB, 2016 5 WL 5110243, at *2 (C.D. Cal. Sept. 20, 2016) (upholding an effective hourly rate of $1,546.39 for 6 9.7 hours of work); Villa v. Astrue, No. CIVS−06-0846-GGH, 2010 WL 118454, at *1-2 (E.D. Cal. 7 Jan. 7, 2010) (approving section 406(b) fees exceeding $1,000 per hour for 10.4 hours of work, and 8 noting that “[r]educing § 406(b) fees after Crawford is a dicey business”). 9 Further, attorney’s fees in the amount of $10,235.00 do not exceed 25% of the past-due 10 benefits awarded and are not excessive in relation to the past-due award. See generally Ortega v. 11 Comm’r of Soc. Sec., No. 1:12-cv-01030-AWI-SAB, 2015 WL 5021646, at *3 (E.D. Cal. Aug. 21, 12 2015) (granting petition for an award of attorney’s fees pursuant to section 406(b) in the amount of 13 $24,350.00); Thomas, 2015 WL 1529331, at *3 (granting petition for an award of attorney’s fees 14 pursuant to section 406(b) in the amount of $44,603.50); Boyle v. Colvin, No. 1:12-cv-00954–SMS, 15 2013 WL 6712552, at *2 (E.D. Cal. Dec. 19, 2013) (granting petition for an award of attorney’s 16 fees pursuant to section 406(b) in the amount of $20,577.57); Jamieson, 2011 WL 587096, at *2 17 (recommending an award of attorney’s fees pursuant to section 406(b) in the amount of $34,500). 18 In making this determination, the Court recognizes the contingent-fee nature of this case 19 and Counsel’s assumption of risk in agreeing to represent Plaintiff under such terms. “District 20 courts generally have been deferential to the terms of contingency fee contracts in § 406(b) cases.” 21 Hearn v. Barnhart, 262 F. Supp. 2d 1033, 1037 (N.D. Cal. 2003) (“Because attorneys like Mr. 22 Sackett contend with a substantial risk of loss in Title II cases, an effective hourly rate of only $450 23 in successful cases does not provide a basis for this court to lower the fee to avoid a ‘windfall.’” 24 (quoting Gisbrecht, 535 U.S. at 807)). Attorneys who agree to represent claimants pursuant to a 25 contingent fee agreement assume the risk of receiving no compensation for their time and effort if 26 the action does not succeed. Id. Here, Counsel accepted substantial risk of loss in representing 27 Plaintiff, whose application had already been denied at the administrative level. Plaintiff agreed to 28 the contingent fee. (See ECF No. 27-2 at 1-2.) Working efficiently and effectively, Counsel 1 secured a remand, and ultimately, the award of substantial benefits to Plaintiff. (See ECF Nos. 22, 2 | 23.) 3 An award of attorney’s fees in the amount of $10,235.00 is, therefore, appropriate. An 4 | award of fees, however, must be offset by any prior award of attorney’s fees granted under the 5 | EAJA. 28 U.S.C. § 2412; Gisbrecht, 535 U.S. at 796. As Plaintiff was previously awarded 6 | $7,344.00 in fees pursuant to the EAJA, Counsel shall refund this amount to Plaintiff. 7 IV. 8 CONCLUSION 9 Accordingly, 10 1. Counsel’s motion for attorney’s fees pursuant to 42 U.S.C. § 406(b) in the amount of 11 $10,235.00, (ECF No. 27), is GRANTED; 12 2. Counsel shall refund to Plaintiff $7,344.00 of the fees awarded as an offset for the EAJA 13 fees previously awarded pursuant to 28 U.S.C. § 2412(d), (ECF No. 26); and 14 3. Counsel shall file on the Court’s docket proof of service of this order upon Plaintiff at her 15 current or last known address. 16 17 1g | IT IS SO ORDERED. 19 Dated: _ August 22, 2023 50 UNITED f£TATES DISTRICT JUDGE
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