(SS) Michael Clamp v. Commissioner of Social Security ( 2022 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 MICHAEL CLAMP, Case No. 1:19-cv-01625-SAB 12 Plaintiff, ORDER GRANTING PETITIONER’S MOTION FOR ATTORNEY FEES 13 v. PURSUANT TO 42 U.S.C. § 406(b) 14 COMMISSIONER OF SOCIAL (ECF Nos. 24, 25, 26) SECURITY, 15 Defendant. 16 17 I. 18 INTRODUCTION 19 Petitioner Jonathan O. Pena (“Counsel” or “Petitioner”), attorney for Plaintiff Michael 20 Clamp (“Plaintiff”), filed the instant amended motion for attorney fees on April 18, 2022. (ECF 21 No. 24.) Counsel requests fees in the net amount of $12,000.00 pursuant to 42 U.S.C. § 22 406(b)(1), with a credit to Plaintiff for the Equal Access to Justice Act, 28 U.S.C. § 2412(d) 23 (“EAJA”) fee in the amount of $1,650.82. Counsel additionally indicates he intends to file a 24 petition with the Office of Hearings Operations for authorization to charge and collect a fee of 25 $16,000.00 for work done at the agency level. Plaintiff was served a copy of the motion but did 26 not file any opposition to Counsel’s request. On April 28, 2022, Defendant Commissioner of 27 Social Security (“Defendant”) filed a response, specifying the filing was made in a role resembling that of trustee for Plaintiff, and that Defendant takes no position on the 1 reasonableness of the fee, but nonetheless noting that Counsel effectively seeks fees based on an 2 hourly rate of $1,188.12. (ECF No. 26.) For the reasons discussed herein, Petitioner’s motion 3 for attorney fees shall be granted. 4 II. 5 BACKGROUND 6 On November 12, 2019, Plaintiff filed this action challenging the denial of social security 7 benefits. (ECF No. 1.) On August 25, 2020, pursuant to the stipulation of the parties, the Court 8 issued an order granting Plaintiff’s social security appeal and remanding the matter for further 9 administrative proceedings. (ECF Nos. 19, 20.) Judgment was entered for Plaintiff the same 10 day. (ECF No. 21.) On October 22, 2020, a stipulation for the award of attorney fees in the 11 amount of $1,650.82 pursuant to the EAJA was filed. (ECF No. 22.) The Court granted the 12 parties’ stipulated request for attorney fees in the amount of $1,650.82 that same day. (ECF No. 13 23.) 14 Following remand, Defendant granted Plaintiff’s application for benefits, entitling 15 Plaintiff to receive approximately $114,032.00 in retroactive benefits. (See ECF No. 24 at 3; Ex. 16 A, ECF No. 24-1 at 4.) The Commissioner withheld $28,508.00 from the past-due benefit for 17 attorney fees. (Id.) This amount equals twenty-five percent (25%) of the retroactive benefit 18 award. (Id.) In the instant motion, Counsel seeks an order awarding attorney fees in the lesser 19 amount of $12,000.00, and further ordering Petitioner to reimburse Plaintiff in the amount of 20 $1,650.82 for the EAJA fees previously paid. (ECF No. 24 at 6.) However, the Court 21 additionally notes Counsel has indicated he will also seek to collect a fee from the Office of 22 Hearings Operations for work done at the agency level in the amount of $16,000.00. (Id. at 8.) 23 This would result in a net sum of attorney fees’ for Counsel of $28,000.00, which very nearly 24 equals the $28,508.00 (twenty-five percent of Plaintiff’s award) withheld by the Commissioner. 25 III. 26 LEGAL STANDARD 27 In relevant part, 42 U.S.C. § 406(b)(1)(A) provides that when a federal court “renders a 1 court may allow reasonable attorney fees “not in excess of 25 percent of the total of the past-due 2 benefits to which the claimant is entitled by reason of such judgment.” The payment of such 3 award comes directly from the claimant’s benefits. 42 U.S.C. § 406(b)(1)(A). 4 The Supreme Court has explained that a district court reviews a petition for section 5 406(b) fees “as an independent check” to assure that the contingency fee agreements between the 6 claimant and the attorney will “yield reasonable results in particular cases.” Gisbrecht v. 7 Barnhart, 535 U.S. 789, 807 (2002). The district court must respect “the primacy of lawful 8 attorney-client fee agreements,” and is to look first at the contingent-fee agreement, and then test 9 it for reasonableness.” Crawford v. Astrue, 586 F.3d 1142, 1148 (9th Cir. 2009) (quoting 10 Gisbrecht, 535 U.S. at 793). The twenty-five percent maximum fee is not an automatic 11 entitlement, and courts are required to ensure that the requested fee is reasonable. Gisbrecht, 535 12 U.S. at 808–09 (“§ 406(b) does not displace contingent-fee agreements within the statutory 13 ceiling; instead, § 406(b) instructs courts to review for reasonableness fees yielded by those 14 agreements”). Agreements seeking fees in excess of twenty-five percent of the past-due benefits 15 awarded are not enforceable. Gisbrecht, 535 U.S. at 807. The attorney has the burden of 16 demonstrating that the fees requested are reasonable. Gisbrecht, 535 U.S. at 807 n.17; Crawford, 17 586 F.3d at 1148. 18 While the Supreme Court in Gisbrecht did not expressly “provide a definitive list of 19 factors that should be considered in determining whether a fee is reasonable or how those factors 20 should be weighed, the Court directed the lower courts to consider the ‘character of the 21 representation and the results the representative achieved.’ ” Crawford, 586 F.3d at 1151 22 (quoting Gisbrecht, 535 U.S. at 808). The Ninth Circuit has stated a court may weigh the 23 following factors under Gisbrecht in determining whether the fee was reasonable: (1) the 24 standard of performance of the attorney in representing the claimant; (2) whether the attorney 25 exhibited dilatory conduct or caused excessive delay which resulted in an undue accumulation of 26 past-due benefits; and (3) whether the requested fees are excessively large in relation to the 27 benefits achieved when taking into consideration the risk assumed in these cases. Crawford, 586 1 Ultimately, an award of section 406(b) fees is offset by an award of attorney fees granted 2 under the EAJA. Gisbrecht, 535 U.S. at 796; Parrish v. Comm’r of Soc. Sec. Admin., 698 F.3d 3 1215, 1219 (9th Cir. 2012) (noting “the EAJA savings provision requires an attorney who 4 receives a fee award under § 2412(d) of the EAJA in addition to a fee award under § 406(b) for 5 the ‘same work’ to refund to the Social Security claimant the smaller award.”). 6 IV. 7 DISCUSSION 8 The Court has conducted an independent check to insure the reasonableness of the 9 requested fees in relation to this action. Gisbrecht, 535 U.S. at 807. Here, the fee agreement 10 dated November 12, 2019, between Plaintiff and Petitioner provides that: “I agree that my 11 attorney shall charge and receive as the fee an amount equal to twenty-five percent (25%) of the 12 past-due benefits that are awarded to my family and me in the event my case is won . . . In 13 addition to the fee, I agree to pay my attorney’s reasonable out-of-pocket expenses that are 14 incurred in representing me . . . As compensation for work beyond the Initial Hearing, including 15 work at Appeals Council, Federal Court and/or Remand/Subsequent Hearing(s), I agree to pay 16 my attorney 25% of Past Due Benefits/Retroactive benefits AWARDED (pre-offset) to me and 17 my family (this includes any auxiliary beneficiaries) resulting from my disability claim at the 18 time benefits are awarded.” (Decl. Jonathan O. Pena (“Pena Decl.”) ¶¶ 6–7, ECF No. 29 at 20; 19 contingency fee agreement, Ex. B, ECF No. 24-2 at 1.) Plaintiff has been awarded retroactive 20 benefits in the amount of $114,032.00. (ECF No. 24 at 3; ECF No. 24-1 at 4.) 21 Consideration of the factors set forth in Gisbrecht and Crawford warrants no reduction of 22 the fee Petitioner seeks. There is no indication that a reduction of fees is warranted for 23 substandard performance. Counsel is an experienced, competent attorney who secured a 24 successful result for Plaintiff. (See Pena Decl. ¶¶ 5–6.) There is no indication that Counsel was 25 responsible for any undue delay in the court proceedings. 26 Plaintiff agreed to a twenty-five percent (25%) fee at the outset of the representation. 27 While the cumulative net fee sought by Counsel very nearly totals the full twenty-five percent 1 agency level will be fully granted by the Office of Hearings Operations. And, in any event, the 2 maximum cumulative fees requested do not exceed twenty-five percent of Plaintiff’s total 3 retroactive award. More importantly, as to the fee requested work performed in federal court, the 4 Court finds the fee is not excessively large in relation to the retroactive award of $114,032.00. In 5 making this determination, the Court recognizes the contingent nature of this case and the risk 6 that counsel took of going uncompensated. Hearn v. Barnhart, 262 F. Supp. 2d 1033, 1037 (N.D. 7 Cal. 2003). 8 In support of the motion, Petitioner submitted a log of the time spent in prosecuting this 9 action. (Pena Decl. ¶ 8; Ex. C, ECF No. 24-3.) The log demonstrates that Petitioner spent 7.9 10 hours on this action, and a paralegal expended 2.2 hours. (Pena Decl. ¶ 8; ECF No. 24-3.) 11 Therefore, Petitioner is seeking $12,000.00 for 10.10 hours of attorney and paralegal time. 12 When considering the total amount requested by Petitioner, the fee request translates to 13 approximately $1,188.12 per hour for the services provided in this action. 14 While this hourly rate may seem high, the Court nevertheless notes that the Ninth Circuit 15 has found fees of $519, $875, and $902 per hour, for time of both attorneys and paralegals, was 16 not excessive. Crawford, 486 F.3d at 1153 (Clifton, J., concurring in part). Further, since 17 Gisbrecht, courts note that reducing a fee request should not be routinely done and find fee 18 awards of an effective hourly rate much higher than this to be reasonable. Williams v. Berryhill, 19 No. EDCV 15-919-KK, 2018 WL 6333695, at *2 (C.D. Cal. Nov. 13, 2018) (awarding fee 20 request that provides an effective hourly rate of $1,553.36 per hour); Coles v. Berryhill, No. 21 EDCV 14-1488-KK, 2018 WL 3104502, at *3 (C.D. Cal. Jun. 21, 2018) (effective hourly rate of 22 $1,431.94 reasonable under the circumstances); Palos v. Colvin, No. CV 15-04261-DTB, 2016 23 WL 5110243, at *2 (C.D. Cal. Sept. 20, 2016) (fees sought translate to $1,546.39 per hour for 24 attorney and paralegal services); see also Villa v. Astrue, No. CIV-S-06-0846 GGH, 2010 WL 25 118454, at *1, n.1 (E.D. Cal. Jan. 7, 2010) (“In practice, the more efficient counsel is in court, 26 the higher will be the hourly fee amount represented in a § 406 fee award.”). 27 In light of the foregoing authorities, the Court finds the requested fees are reasonable in 1 | representation of Plaintiff resulted in the action being remanded for further proceedings and 2 | ultimately, substantial benefits were awarded. 3 The award of Section 406(b) fees is offset by any prior award of attorney fees granted 4 | under the EAJA. 28 U.S.C. § 2412; Gisbrecht, 535 U.S. at 796. In this instance, as noted above, 5 | the parties filed a stipulation on October 22, 2020, for the award of attorney fees in the amount of 6 | $1,650.82 pursuant to the EAJA (ECF No. 22), which the Court granted that same day (ECF No. 7 Accordingly, the Court shall order Petitioner to reimburse Plaintiff in the amount of EAJA 8 | fees ultimately received in the amount of $1,650.82. 9 V. 10 CONCLUSION AND ORDER 11 For the reasons stated above, the Court finds that the fees sought by Petitioner pursuant to 12 | Section 406(b) are reasonable. Accordingly, IT IS HEREBY ORDERED that: 13 1. Petitioner’s motion for an award of attorney fees pursuant to Section 406(b) in the 14 amount of $12,000.00 is GRANTED; 15 2. The Court authorizes payment to Petitioner in the amount of $12,000.00, 16 representing attorney fees being withheld from Plaintiff's past due disability 17 benefits; and 18 3. Upon receipt of this sum, Petitioner shall remit $1,650.82 directly to Plaintiff as 19 an offset for EAJA fees awarded pursuant to 298 U.S.C. § 2412. 20 IT IS SO ORDERED. FA. ee 4 | Dated: _ May 19, 2022 UNITED STATES MAGISTRATE JUDGE 23 24 25 26 27 28