(SS) Johnson v. Commissioner of Social Security ( 2020 )

1 2 3 4 5 6 UNITED STATES DISTRICT COURT 7 EASTERN DISTRICT OF CALIFORNIA 8 9 DONNA JOHNSON, Case No. 1:18-cv-00818-SKO 10 Plaintiff, ORDER GRANTING PLAINTIFF’S 11 v. COUNSEL’S UNOPPOSED MOTION FOR ATTORNEY’S FEES PURSUANT TO 12 ANDREW SAUL, 42 U.S.C. § 406(b) Acting Commissioner of Social Security1, 13 (Doc. 21) Defendant. / 14 15 I. INTRODUCTION 16 17 On September 23, 2020, Jonathan Omar Pena (“Counsel”), counsel for Plaintiff Donna 18 Johnson (“Plaintiff”), filed a motion for an award of attorney’s fees pursuant to 42 U.S.C. § 406(b) 19 (“section 406(b)”). (Doc. 21.) On September 24, 2020, the Court issued a minute order requiring 20 Plaintiff and the Commissioner to file their responses in opposition or statements of non- 21 opposition to Counsel’s motion, if any, by no later than October 16, 2020. (Doc. 22.) Plaintiff 22 and the Commissioner were served with copies of the motion for attorney’s fees and the minute 23 order. (Docs. 21, 23.) On October 16, 2020, the Commissioner timely filed a response, 24 acknowledging that he was not a party to the contingent-fee agreement between Plaintiff and 25 Counsel and therefore “not in a position to either assent or object to the § 406(b) fees that Counsel 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 seeks from Plaintiff’s past-due benefits,” but nevertheless taking “no position on the 2 reasonableness of the request.” (See Doc. 24 at 2–3, 5.) Plaintiff did not file any objection to the 3 motion by the October 16, 2020 deadline (See Docket). The motion is therefore deemed 4 unopposed. 5 For the reasons set forth below, Counsel’s motion for an award of attorney’s fees is 6 granted in the amount of $14,089.50, subject to an offset of $8,100.00 in fees already awarded 7 pursuant to the Equal Access to Justice Act (“EAJA”), 28 U.S.C. § 2412(d), on June 17, 2019 (see 8 Doc. 23). 9 II. BACKGROUND 10 Plaintiff brought the underlying action seeking judicial review of a final administrative 11 decision denying her claim for disability benefits under the Social Security Act. (Doc. 1.) The 12 Court reversed the Commissioner’s denial of benefits and remanded the case to the agency for 13 further proceedings. (Doc. 17.) Judgment was entered in favor of Plaintiff and against the 14 Commissioner on May 7, 2019. (Doc. 18.) On June 14, 2019, the parties stipulated to an award of 15 $8,100.00 in attorney fees under EAJA, which was entered on June 17, 2019. (Docs. 19, 20.) 16 On remand, the Commissioner found Plaintiff disabled as of November 2, 2015. (See Doc. 17 21-1.) On September 5, 2020, the Commissioner issued a letter to Plaintiff approving her claim 18 for benefits and awarding her $56,358.00 in back payments beginning May 2016. (See Doc. 21-1 19 at 3 (indicating 25% of past due benefits totals $14,089.50.).) On September 23, 2020, Counsel 20 filed a motion for attorney’s fees in the amount of $14,089.50, equal to 25% of Plaintiff’s back 21 benefits, with an offset of $8,100.00 for EAJA fees already awarded. (Doc. 21 at 3.) It is 22 Counsel’s section 406(b) motion for attorney’s fees that is currently pending before the Court. 23 III. DISCUSSION 24 Pursuant to the Social Security Act, attorneys may seek a reasonable fee for cases in which 25 they have successfully represented social security claimants. Section 406(b) provides the 26 following: 27 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 28 1 by reason of such judgment, and the Commissioner of Social Security may . . . 2 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 . . . . 3 42 U.S.C. § 406(b)(1)(A) (emphasis added). “In contrast to fees awarded under fee-shifting 4 provisions such as 42 U.S.C. § 1988, the fee is paid by the claimant out of the past-due benefits 5 awarded; the losing party is not responsible for payment.” Crawford v. Astrue, 586 F.3d 1142, 6 1147 (9th Cir. 2009) (en banc) (citing Gisbrecht v. Barnhart, 535 U.S. 789, 802 (2002)). The 7 Commissioner has standing to challenge the award, despite that the section 406(b) attorney’s fee 8 award is not paid by the government. Craig v. Sec’y Dep’t of Health & Human Servs., 864 F.2d 9 324, 328 (4th Cir. 1989), abrogated on other grounds in Gisbrecht, 535 U.S. at 807. The goal of 10 fee awards under section 406(b) is to provide adequate incentive to represent claimants while 11 ensuring that the usually meager disability benefits received are not greatly depleted. Cotter v. 12 Bowen, 879 F.2d 359, 365 (8th Cir. 1989), abrogated on other grounds in Gisbrecht, 535 U.S. at 13 807.1 14 The 25% maximum fee is not an automatic entitlement, and courts are required to ensure 15 that the requested fee is reasonable. Gisbrecht, 535 U.S. at 808–09 (Section 406(b) does not 16 displace contingent-fee agreements within the statutory ceiling; instead, section 406(b) instructs 17 courts to review for reasonableness fees yielded by those agreements). “Within the 25 percent 18 boundary . . . the attorney for the successful claimant must show that the fee sought is reasonable 19 for the services rendered.” Id. at 807; see also Crawford, 586 F.3d at 1148 (holding that section 20 406(b) “does not specify how courts should determine whether a requested fee is reasonable” but 21 “provides only that the fee must not exceed 25% of the past-due benefits awarded”). 22 Generally, “a district court charged with determining a reasonable fee award under 23 § 406(b)(1)(A) must respect ‘the primacy of lawful attorney-client fee arrangements,’ . . . ‘looking 24 first to the contingent-fee agreement, then testing it for reasonableness.’” Crawford, 586 F.3d at 25 1148 (quoting Gisbrecht, 535 U.S. at 793, 808). The United States Supreme Court has identified 26 several factors that may be considered in determining whether a fee award under a contingent-fee 27 agreement is unreasonable and therefore subject to reduction by the court: (1) the character of the 28 1 representation; (2) the results achieved by the representative; (3) whether the attorney engaged in 2 dilatory conduct in order to increase the accrued amount of past-due benefits; (4) whether the 3 benefits are large in comparison to the amount of time counsel spent on the case; and (5) the 4 attorney’s record of hours worked and counsel’s regular hourly billing charge for non-contingent 5 cases. Id. (citing Gisbrecht, 535 U.S. at 807–08). 6 Here, the fee agreement between Plaintiff and Counsel, signed by both parties, provides: 7 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 8 EAJA award as his or her sole compensation for representing me in court. 9 However, my 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 10 awards an attorney 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. 11 In no case will the fee that comes out of the back benefits paid on my account be 12 greater than 25% of back benefits (including the fee paid for work on my case before the Social Security Administration). 13 14 (Doc. 21-2 (signed June 4, 2018).) 15 The Court has considered the character of Counsel’s representation of Plaintiff and the 16 good results achieved by Counsel, which included an award of benefits. Counsel spent 45.85 17 hours representing Plaintiff, ultimately gaining a favorable decision in that the Commissioner’s 18 decision was reversed and remanded to the agency for reconsideration. (Doc. 21 at 4–5, 7; Doc. 19 21-3 (time sheets accounting for 45.85 attorney hours spent representing Plaintiff before this 20 Court).) There is no indication that a reduction of the award is warranted due to any substandard 21 performance by Counsel as Counsel secured a successful result for Plaintiff. There is also no 22 evidence that Counsel engaged in any dilatory conduct resulting in delay. 23 Although the accepted range in the Fresno Division for attorneys like Counsel with less 24 than ten years of experience (see Doc. 21 at 7) is between $175 and $300 per hour in non- 25 contingency cases, see Silvester v. Harris, No. 1:11–CV–2137 AWI SAB, 2014 WL 7239371 at 26 *4 (E.D. Cal. Dec. 17, 2014), here the effective hourly rate requested equals $307.29 per hour. 27 (See Doc. 21 at 8.) This hourly rate is not excessive when compared to what the Ninth Circuit has 28 approved in cases involving social security contingency fee arrangements. See Crawford, 586 1 F.3d 1142, 1153 (9th Cir. 2009) (explaining that the majority opinion found reasonable effective 2 hourly rates equaling $519, $875, and $902) (J. Clifton, concurring in part and dissenting in part); 3 see also Thomas v. Colvin, No. 1:11−cv−01291−SKO, 2015 WL 1529331, at *2−3 (E.D. Cal. Apr. 4 3, 2015) (upholding an effective hourly rate of $1,093.22 for 40.8 hours of work); Jamieson v. 5 Astrue, No. 1:09CV0490 LJO DLB, 2011 WL 587096, at *2 (E.D. Cal. Feb. 9, 2011) (upholding 6 an effective hourly rate of $1,169.49 for 29.5 hours of work); Palos v. Colvin, No. CV 7 15−04261−DTB, 2016 WL 5110243, at *2 (C.D. Cal. Sept. 20, 2016) (upholding an effective 8 hourly rate of $1,546.39 for 9.7 hours of work); Villa v. Astrue, No. CIV−S−06−0846 GGH, 2010 9 WL 118454, at *1−2 (E.D. Cal. Jan. 7, 2010) (approving section 406(b) fees exceeding $1,000 per 10 hour for 10.4 hours of work, and noting that “[r]educing § 406(b) fees after Crawford is a dicey 11 business”). Further, attorney’s fees in the amount of $14,089.50 do not exceed 25% of the past- 12 due benefits awarded and are not excessive in relation to the past-due award. See generally 13 Ortega v. Comm’r of Soc. Sec., No. 1:12–cv–01030–AWI–SAB, 2015 WL 5021646, at *3 (E.D. 14 Cal. Aug. 21, 2015) (granting petition for an award of attorney’s fees pursuant to section 406(b) in 15 the amount of $24,350.00); Thomas, 2015 WL 1529331, at *3 (granting petition for an award of 16 attorney’s fees pursuant to section 406(b) in the amount of $44,603.50); Boyle v. Colvin, No. 17 1:12–cv–00954–SMS, 2013 WL 6712552, at *2 (E.D. Cal. Dec. 19, 2013) (granting petition for an 18 award of attorney’s fees pursuant to section 406(b) in the amount of $20,577.57); Jamieson, 2011 19 WL 587096, at *2 (recommending an award of attorney’s fees pursuant to section 406(b) in the 20 amount of $34,500). 21 In making this determination, the Court recognizes the contingent-fee nature of this case 22 and Counsel’s assumption of risk in agreeing to represent Plaintiff under such terms. “District 23 courts generally have been deferential to the terms of contingency fee contracts in § 406(b) cases.” 24 Hearn v. Barnhart, 262 F. Supp. 2d 1033, 1037 (N.D. Cal. 2003) (“Because attorneys like Mr. 25 Sackett contend with a substantial risk of loss in Title II cases, an effective hourly rate of only 26 $450 in successful cases does not provide a basis for this court to lower the fee to avoid a 27 ‘windfall.’” (quoting Gisbrecht, 535 U.S. at 807)). Attorneys who agree to represent claimants 28 pursuant to a contingent fee agreement assume the risk of receiving no compensation for their time 1 and effort if the action does not succeed. Id. Here, Counsel 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. 21-2.) Working efficiently and effectively, 4 Counsel secured a remand, and ultimately, the award of substantial benefits to Plaintiff. (See 5 Docs. 17, 21-1.) 6 An award of attorney’s fees pursuant to section 406(b) in the amount of $14,089.50 is, 7 therefore, appropriate. An award of section 406(b) fees, however, must be offset by any prior 8 award of attorney’s fees granted under the EAJA. 28 U.S.C. § 2412; Gisbrecht, 535 U.S. at 796. 9 As Plaintiff was previously awarded $8,100.00 in fees pursuant to the EAJA, Counsel shall refund 10 this amount to Plaintiff. 11 IV. CONCLUSION AND ORDER 12 For the reasons stated above, the Court concludes that the fees sought by Counsel pursuant 13 to section 406(b) are reasonable. Accordingly, IT IS ORDERED that: 14 1. Counsel’s unopposed motion for an award of attorney’s fees pursuant to 42 U.S.C. 15 § 406(b) in the amount of $14,089.50 (Doc. 21) is granted; 16 2. Counsel shall refund to Plaintiff $8,100.00 of the section 406(b) fees awarded as an 17 offset for the EAJA fees previously awarded pursuant to 28 U.S.C. § 2412(d) (Doc. 20); and 18 3. Counsel for Plaintiff shall file on the Court’s docket proof of service of this order 19 upon Plaintiff at her current or last known address. 20 IT IS SO ORDERED. 21 Sheila K. Oberto 22 Dated: November 6, 2020 /s/ . UNITED STATES MAGISTRATE JUDGE 23 24 25 26 27 28