(SS)Flores v. Commissioner of Social Security ( 2024 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 ALEJANDRO ALDACO FLORES, Case No. 1:20-cv-01780-EPG 11 Plaintiff, ORDER GRANTING MOTION FOR 12 ATTORNEY’S FEES PURSUANT TO 42 13 v. U.S.C. § 406(b) COMMISSIONER OF SOCIAL SECURITY, 14 (ECF No. 26) Defendant. 15 16 On February 28, 2024, Counsel Monica Perales, counsel for Plaintiff Alejandro Aldaco 17 Flores, filed a motion for an award of attorney’s fees under 42 U.S.C. § 406(b). (ECF No. 26). 18 Plaintiff and the Commissioner of Social Security were each served with a copy of the motion. 19 (Id. at 19). Plaintiff has not filed any response to the motion. On March 7, 2024, the 20 Commissioner filed a response providing analysis regarding the fee request but taking no position 21 on its reasonableness. (ECF No. 29). The parties have consented to entry of final judgment by the 22 United States Magistrate Judge under the provisions of 28 U.S.C. § 636(c) with any appeal to the 23 Court of Appeals for the Ninth Circuit. (ECF No. 11). 24 For the reasons set forth below, the motion for attorney’s fees is granted in the amount of 25 $15,912.00, subject to an offset of $5,366.00 in fees already awarded pursuant to the Equal Access to Justice Act (EAJA), 28 U.S.C. § 2412(d), on June 21, 2022 (ECF No. 25). 26 // 27 28 1 I. BACKGROUND 2 Plaintiff filed the complaint in this case on December 17, 2020. (ECF No. 1). 3 On May 5, 2022, the undersigned entered a final order reversing the Commissioner’s 4 decision, remanding for an immediate award of benefits, and entering judgment in favor of Plaintiff and against the Commissioner. (ECF Nos. 22, 23). On June 21, 2022, pursuant to the 5 parties’ stipulation, the Court entered an order awarding Plaintiff $5,366.00 in EAJA fees. (ECF 6 Nos. 24, 25). 7 On remand, the Commissioner calculated Plaintiff’s past-due benefits at $63,648.101 and 8 25%, i.e., $15,912.03, was withheld to pay Plaintiff’s representative. (ECF No. 26-3 at 3). This 9 matter is now before the Court on counsel’s motion, seeking an award of $15, 912.00. (ECF No. 10 23). 11 II. DISCUSSION 12 Under the Social Security Act, attorneys may seek a reasonable fee for cases in which 13 they have successfully represented social security claimants. Section 406(b) provides: 14 Whenever a court renders a judgment favorable to a claimant under this subchapter 15 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 representation, not in excess 16 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 of Social Security may . . . 17 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 . . . . 18 42 U.S.C. § 406(b)(1)(A) (emphasis added). 19 “In contrast to fees awarded under fee-shifting provisions such as 42 U.S.C. § 1988, the 20 [§ 406(b)] fee is paid by the claimant out of the past-due benefits awarded; the losing party is not 21 responsible for payment.” Crawford v. Astrue, 586 F.3d 1142, 1147 (9th Cir. 2009) (en banc) 22 (citing Gisbrecht v. Barnhart, 535 U.S. 789, 802 (2002)). Even though the § 406(b) fee award is 23 not paid by the Government, the Commissioner “plays a part in the fee determination resembling 24 25 1 Counsel’s motion asserts that the past due benefits payable to Plaintiff totaled $79,560.13. (ECF No. 26 at 6; see also ECF No. 26 at 16 (“The Commissioner issued a notice in this matter dated January 28, 2024, indicating that the retroactive benefits total $79,560.13.”)). However, the notice from the Commissioner sent to Plaintiff states as 26 follows: “Your past-due benefits are $63,648.10 for October 2017 through April 2022. This period represents your month of entitlement through the month before May 04, 2022, the date of the federal court’s favorable decision. You 27 lawyer may ask the court to approve a fee no larger than 25 percent of past due benefits. Past due benefits are those payable through April 2022, the month before the court’s decision. For this reason, we are withholding $15,912.03.” 28 (ECF No. 26-3 at 3). 1 that of a trustee for the claimant[].” Gisbrecht, 535 U.S. at 798 n. 6. The goal of awarding fees 2 under § 406(b) was to prohibit “exorbitant fees” from being collected by attorneys but also to 3 provide sufficient fee awards “to encourage adequate representation of claimants.” Crawford, 586 4 F.3d at 1149 (internal citations omitted). The 25% maximum fee is not an automatic entitlement, and courts are required to ensure 5 that the requested fee is reasonable. Gisbrecht, 535 U.S. at 808-09 (holding that § 406(b) does not 6 displace contingent-fee agreements within the statutory ceiling; instead, § 406(b) instructs courts 7 to review for reasonableness fees yielded by those agreements). “Within the 25 percent boundary 8 . . . the attorney for the successful claimant must show that the fee sought is reasonable for the 9 services rendered.” Id. at 807; see also Crawford, 586 F.3d at 1148 (noting that § 406(b) “does 10 not specify how courts should determine whether a requested fee is reasonable” but “provides 11 only that the fee must not exceed 25% of the past-due benefits awarded”). 12 Generally, “a district court charged with determining a reasonable fee award under 13 § 406(b)(1)(A) must respect ‘the primacy of lawful attorney-client fee arrangements,’ . . . 14 ‘looking first to the contingent-fee agreement, then testing it for reasonableness.’” Crawford, 586 15 F.3d at 1148 (quoting Gisbrecht, 535 U.S. at 808). The United States Supreme Court has 16 identified several factors that may be considered in determining whether a fee award under a 17 contingent-fee agreement is unreasonable and therefore subject to reduction: (1) the character of 18 the representation; (2) the results achieved by the representative; (3) whether the attorney engaged 19 in dilatory conduct in order to increase the accrued amount of past-due benefits; (4) whether the 20 benefits are large in comparison to the amount of time counsel spent on the case; and (5) the 21 attorney’s record of hours worked. Id. (citing Gisbrecht, 535 U.S. at 807-08). 22 Here, Counsel Perales seeks an award of $15,912.00 under 42 U.S.C. § 406(b) for 26.7 23 total hours of attorney and paralegal time.2 (ECF No. 26 at 16; ECF No. 26-4). The requested amount is approximately equivalent to 25% of the past due benefits payable to Plaintiff. (ECF No. 24 26-3 at 3). 25 The fee agreement signed by Plaintiff at the outset of litigation specifically provides for a 26 27 2 Based on the itemized time entries, 23.60 hours were expended by Counsel Monica Perales, while 3.10 hours were 28 expended by three paralegals, Enedina Perez, Alexandra Rojas, and Marylin Ibarra. (ECF No. 26-4 at 1-2). 1 fee of “25% of the past due benefits awarded upon reversal of any unfavorable ALJ decision for 2 work before the Social Security Administration” as well as a “separate” fee equal to “25% of the 3 past due benefits awarded upon reversal of any unfavorable ALJ decision for work before the 4 court.” (ECF No. 26-1). Counsel Perales states in her declaration that she does not intends to seek additional fees under 42 U.S.C. § 406(a). (ECF No. 26 at 16). 5 The Court has considered the character of counsel’s representation of Plaintiff and the 6 good results achieved by counsel, which includes an award of benefits. Here, the record of 26.7 7 hours expended in this matter is supported by itemized time entries. (ECF No. 26-4). This time 8 included preparing a settlement proposal, reviewing the 2417-page administrative record, and 9 preparing an opening brief. The time expended resulted in the Court reversing the 10 Commissioner’s decision and remanding for an immediate award of benefits. There is no 11 indication that a reduction of the award is warranted due to any substandard performance by 12 Plaintiff’s counsel as counsel secured a successful result for Plaintiff. There also is no evidence 13 that counsel engaged in any dilatory conduct resulting in delay. 14 Counsel’s requested award of $15,912.00 for 26.7 hours of legal services, results in an 15 approximate combined hourly rate for attorney and paralegal time of $595.95. The Ninth Circuit 16 has found similar and higher effective hourly rates reasonable in social security contingency fee 17 arrangements. See, e.g., Crawford, 586 F.3d at 1153 (explaining that the majority opinion found 18 reasonable effective hourly rates equaling $519, $875, and $902) (J. Clifton, concurring in part 19 and dissenting in part). Moreover, while the requested attorney’s fees award of $15,912.00 is 20 approximately equivalent to 25% of the past-due benefits, the amount sought by Counsel does not 21 exceed 25% of past-due benefits, i.e., $15,912.03. 22 In making this determination, the Court recognizes the contingent-fee nature of this case 23 and counsel’s assumption of risk in agreeing to represent Plaintiff under such terms. “District 24 courts generally have been deferential to the terms of contingency fee contracts in § 406(b) 25 cases.” Harris v. Barnhart, 262 F. Supp. 2d 1033, 1037 (N.D. Cal. 2003). Attorneys who agree to 26 represent claimants pursuant to a contingent fee agreement assume the risk of receiving no 27 compensation for their time and effort if the action fails. Id. Here, Plaintiff’s counsel accepted the 28 risk of loss in representing Plaintiff throughout this matter, Plaintiff agreed to the contingent fee, 1 | and counsel successfully secured a remand and an award of substantial benefits to Plaintiff. 2 An award of attorney fees pursuant to § 406(b) in the amount of $15,912.00 is thus 3 | appropriate. An award of § 406(b) fees, however, must be offset by any prior award of attorney 4 | fees granted under the EAJA. See 28 U.S.C. § 2412; Gisbrecht, 535 U.S. at 796. Counsel was 5 || previously awarded $5,366.00 in fees pursuant to the EAJA; as such, the § 406(b) award will be 6 | offset by $5,366.00. 7 | I. CONCLUSION AND ORDER 8 For the reasons stated above, IT IS ORDERED that the motion for attorney fees (ECF No. 9 | 26) under 42 U.S.C. § 406(b) is GRANTED as follows: 10 1. The Commissioner is directed to certify the fee of $15,912.00 payable to the Law ll Offices of Lawrence D. Rohlfing, Inc., CPC out of Plaintiffs past-due benefits in accordance with agency policy. B 2. Plaintiff’s counsel is directed to reimburse Plaintiff $5,366.00 for the EAJA fees 4 previously awarded pursuant to 28 U.S.C. § 2412(d) upon the receipt of these fees. 3. Plaintiffs counsel is directed to serve a copy of this Order on Plaintiff and shall thereafter file a certificate of service on the docket. U7 IT IS SO ORDERED. 18 | Dated: _Mareh 14, 2024 [sf hey □ 19 UNITED STATES MAGISTRATE JUDGE 20 21 22 23 24 25 26 27 28