(SS) Subido v. Commissioner of Social Security ( 2021 )

1 2 3 4 5 6 7 8 IN THE UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 NICHOLAS MATEO No. 2:16-CV-0079-TLN-DMC THOMPSON SUBIDO 12 Plaintiff, 13 ORDER v. 14 COMMISSIONER OF SOCIAL 15 SECURITY, 16 Defendant. 17 18 19 Plaintiff, who is proceeding with retained counsel, brought this action for judicial 20 review of a final decision of the Commissioner of Social Security under 42 U.S.C. § 405(g). 21 Final judgement was entered on February 13, 2018. See ECF No. 34. Pending before the Court 22 is Plaintiff’s counsel’s motion for an award of attorney’s fees in the amount of $8,599.62 under 23 42 U.S.C. § 406(b). See ECF No. 41. Plaintiff was provided notice of counsel’s motion and has 24 not filed any response thereto. 25 / / / 26 / / / 27 / / / 28 / / / 1 I. PROCEDURAL HISTORY 2 Plaintiff’s representation in this case was provided by way of an October 27, 2016, 3 contingent fee agreement whereby Plaintiff agreed to pay counsel: (1) 25% of any benefits 4 awarded at or prior to a first administrative hearing, or $6,000.00, whichever is smaller; (2) 25% 5 of any benefits awarded upon reversal of an unfavorable administrative decision for work before 6 the agency; and (3) 25% of past-due benefits awarded upon reversal of an unfavorable 7 administrative decision for work before the court. See ECF No. 42-1, pg. 1. Plaintiff initiated 8 this action for judicial review of an unfavorable administrative decision on January 13, 2016. See 9 ECF No. 1. Following briefing on the merits, the matter was remanded on February 13, 2018, for 10 further administrative proceedings. See ECF No. 34. Pursuant to the stipulation of the parties, 11 Plaintiff was awarded $4,000.00 in attorney’s fees and costs under the Equal Access to Justice 12 Act (EAJA), payable to Plaintiff less any offsets to be determined by the government. See ECF 13 No. 37. On March 11, 2019, the Commissioner provided notice of benefits awarded pursuant to a 14 fully favorable decision. See ECF No. 41-2, pgs. 1-14. In this notice, the Commissioner 15 informed Plaintiff that $8,599.62 had been withheld from past-due benefits awarded, constituting 16 25% of the total $34,398.48 in past-due benefits awarded. See Id. The notice also indicated an 17 amount of $6,000.00 “Due to Attorney.” Id. Plaintiff’s counsel states the Commissioner has 18 already paid him $6,000.00 of the 5% withheld. See ECF No. 41, pg. 6. 19 20 II. DISCUSSION 21 Under the Social Security Act, “[w]henever a court renders a judgment favorable 22 to a claimant under this subchapter who was represented before the court by an attorney, the court 23 may determine and allow as part of its judgment a reasonable fee for such representation, not in 24 excess of 25 percent of the total past-due benefits to which the claimant is entitled by reason of 25 such judgment. . . .” 42 U.S.C. § 406(b)(1)(A). No other fee may be payable or certified for such 26 representation except as allowed in this provision. See id. 27 / / / 28 / / / 1 A remand constitutes a “favorable judgment” under § 406(b). See Shalala v. 2 Schaefer, 509 U.S. 292, 300-01 (1993). While the Ninth Circuit has not directly addressed the 3 issue, all other circuits to address the issue have concluded that the district court is authorized to 4 award fees under § 406(b) when it remands for further proceedings and, following remand, the 5 claimant is awarded past-due benefits. See Garcia v. Astrue, 500 F. Supp. 2d 1239, 1243 (C.D. 6 Cal. 2007). Limiting § 406(b) awards to cases in which the district court itself awards past-due 7 benefits would discourage counsel from requesting a remand where it is appropriate. See Bergen 8 v. Comm’r of Soc. Sec., 454 F.3d 1273, 1277 (11th Cir. 2006). 9 The 25 percent statutory maximum fee is not an automatic entitlement, and the 10 court must ensure that the fee actually requested is reasonable. See Gisbrecht v. Barnhart, 535 11 U.S. 789, 808-09 (2002). “Within the 25 percent boundary . . . the attorney for the successful 12 claimant must show that the fee sought is reasonable for the services rendered.” Id. at 807. “In 13 determining the reasonableness of fees sought, the district court must respect ‘the primacy of 14 lawful attorney-client fee arrangements,’ ‘looking first to the contingent-fee agreement, then 15 testing it for reasonableness.’” Crawford v. Astrue, 586 F.3d 1142, 1149 (9th Cir. 2009) (quoting 16 Gisbrecht, 535 U.S. at 793 and 808). 17 The Supreme Court has identified five factors that may be considered in 18 determining whether a fee award under a contingent-fee agreement is unreasonable and therefore 19 subject to reduction by the court. See Crawford, 586 F.3d at 1151-52 (citing Gisbrecht, 535 U.S. 20 at 808). Those factors are: (1) the character of the representation; (2) the results achieved by the 21 representative; (3) whether the attorney engaged in dilatory conduct in order to increase the 22 accrued amount of past-due benefits; (4) whether the benefits are large in comparison to the 23 amount of time counsel spent on the case; and (5) the attorney’s record of hours worked and 24 counsel’s regular hourly billing charge for non-contingent cases. See id. 25 Finally, an award of fees under § 406(b) is offset by any prior award of attorney’s 26 fees granted under the Equal Access to Justice Act. See Gisbrecht, 535 U.S. at 796. 27 / / / 28 / / / 1 The Commissioner has filed a response to Plaintiff’s counsel’s motion. Other than 2 noting counsel’s failure to serve Plaintiff – a procedural defect counsel has cured – this filing 3 amounts to nothing more than a recitation of applicable caselaw and contains nothing in the way 4 of analysis specific to this case. In particular, the Commissioner’s response does not set forth any 5 reasons why the Court should deny, in whole or in part, counsel’s motion, other than the now- 6 cured procedural defect. The Court, therefore, considers Plaintiff’s counsel’s motion as 7 unopposed. In this case, having considered the factors above, the Court finds Plaintiff’s counsel’s 8 request reasonable given the fee agreement with Plaintiff, the results achieved, and the lack of any 9 evidence of dilatory conduct designed to increase past-due benefits. In making this finding, the 10 Court notes that the Commissioner stipulated to an award of $4,000.00 under the EAJA, which 11 Plaintiff’s counsel appropriately asks be ordered to offset any award requested in the current 12 motion. 13 Counsel contends – and the Court agrees – that he should be awarded a total 14 amount under § 406(b) of $8,599.62, representing 25% of total past-due benefits awarded 15 pursuant to the contingency fee agreement with Plaintiff. Counsel also states that he has already 16 been paid $6,000.00 by the Commissioner. In the Court’s view, this represents a partial payment 17 by the Commissioner of the total due under § 406(b). Thus, counsel is owed an additional 18 $2,599.62 from the Commissioner. To the extent counsel has been holding $6,000.00 aside for 19 Plaintiff in a client trust account, he need no longer do so. Counsel shall be required to reimburse 20 Plaintiff the $4,000.00 counsel has already been paid under the EAJA. 21 The Court declines to adopt Plaintiff’s counsel’s suggestion that the Commissioner 22 be ordered to pay amounts directly to Plaintiff. The mechanism by which the agency withholds 23 funds from an award of past-due benefits contemplates that the Commissioner pay counsel 24 directly in an amount authorized by the Court. The Court finds no reason to inject Plaintiff 25 further into any additional administrative payment process. Ultimately, the process ordered 26 below accomplishes the same net payments to counsel and Plaintiff. It merely puts the onus of 27 resolving any issues with the agency on counsel, and removes the agency from any dispute 28 between counsel and his client concerning fees. 1 I. CONCLUSION 2 Accordingly, IT IS HEREBY ORDERED that: 3 1. Plaintiff's counsel’s motion, ECF No. 41, is granted and counsel is 4 | awarded fees pursuant to 42 U.S.C. § 406(b) in the amount of $8,599.62; 5 2. The Commissioner of Social Security shall pay to Plaintiff's counsel the 6 | amount of $2,599.62, such amount reflecting $6,000.00 already paid to counsel by the 7 | Commissioner out of total past-due benefits awarded to Plaintiff and previously withheld, to the 8 || extent such benefits have not already been paid to Plaintiff; and 9 3. Counsel shall reimburse to Plaintiff $4,000.00 previously paid to counsel 10 || under the EAJA. 11 12 | Dated: August 31, 2021 Ssvcqo_ 13 DENNIS M. COTA 14 UNITED STATES MAGISTRATE JUDGE 15 16 17 18 19 20 21 22 23 24 25 26 27 28