Lee v. Saul ( 2023 )

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 SAN JOSE DIVISION 7 8 A.L., Case No. 20-cv-02245-VKD 9 Plaintiff, ORDER GRANTING MOTION FOR 10 v. ATTORNEYS’ FEES 11 KILOLO KIJAKAZI, Re: Dkt. No. 28 Defendant. 12 13 14 Harvey P. Sackett, of Sackett and Associates, counsel for plaintiff A.L.,1 moves for an 15 award of attorneys’ fees pursuant to 42 U.S.C. § 406(b) after A.L. obtained an award of past-due 16 benefits from the Social Security Administration. Dkt. No. 28-1. Mr. Sackett seeks $20,111.75 17 for his work representing A.L. before this Court. Id. at 2. For the reasons discussed below, the 18 Court grants the motion. 19 I. BACKGROUND 20 This case arises out of A.L.’s application for disability insurance and supplemental security 21 income benefits under Titles II and XVI of the Social Security Act, 42 U.S.C. §§ 401, et seq.; 22 1381 et seq. A.L.’s applications were denied initially and on reconsideration. An administrative 23 law judge (“ALJ”) held a hearing and subsequently issued an unfavorable decision on September 24 26, 2018. Dkt. No. 24 at 2. The Appeals Council subsequently denied A.L.’s request for review 25 of the ALJ’s decision. Id. at 3. On April 2, 2020, A.L. then filed this action seeking judicial 26 1 Because opinions by the Court are more widely available than other filings this order refers to 27 the plaintiff only by her initials. This order does not alter the degree of public access to other 1 review of the decision denying her applications for benefits. Dkt. No. 1. 2 On December 6, 2021, the Court issued an order granting A.L.’s motion for summary 3 judgment, denying the Commissioner’s cross-motion for summary judgment, and remanding the 4 case further administrative proceedings. Dkt. No. 24. On January 27, 2022, the Court approved 5 the parties’ stipulation for an award of fees in the amount of $4,826.58 to Mr. Sackett pursuant to 6 the Equal Access to Justice Act (“EAJA”), 28 U.S.C. § 2142. Dkt. No. 27. 7 On remand from this Court’s order, the Social Security Administration concluded that A.L. 8 is entitled to received past due benefits in the amount of $80,447.00. Dkt. Nos. 28-3, 28-4. The 9 agency withheld $20,111.75, representing 25% of A.L.’s past due benefits, for the possible 10 payment of attorneys’ fees. Dkt. No. 28-4 at ECF 5. 11 On November 26, 20218, prior to the filing of this action, A.L. and Mr. Sackett entered 12 into a contingency fee agreement in which A.L. agreed that to “pay Sackett and Associates, 13 subject to the approval of the Social Security Administration for representation at the 14 administrative level, and by the district or circuit court for representation at the judicial level, a fee 15 no greater than 25% of the past-due benefits owed to me.” Dkt. No. 28-5. Mr. Sackett now seeks 16 attorneys’ fees in the amount of $20, 111.75, representing 25% of A.L.’s overall award of past-due 17 benefits, pursuant to 42 U.S.C. § 406(b) and the fee agreement. Dkt. No. 28-1 at 2. Mr. Sackett 18 acknowledges that he must reimburse A.L. for the previous $4,826.58 EAJA fee award. Id. 19 The record indicates that Mr. Sackett mailed a copy of his motion to A.L. on November 6, 20 2023. Dkt. No. 28-9. The Court has received no objection or any other response from A.L. The 21 Commissioner filed a timely response to Mr. Sackett’s motion. Dkt. No. 30. The Commissioner 22 takes no position the reasonableness of the requested fee, but suggests that if the Court determines 23 Mr. Sackett is entitled to fees, it should direct that they be “paid out of Plaintiff’s past-due benefits 24 in accordance with agency policy,” rather than ordering Mr. Sackett to be paid directly. Id. at 2-3. 25 II. DISCUSSION 26 When a court renders judgment favorable to a social security claimant represented by an 27 attorney, “the court may determine and allow as part of its judgment a reasonable fee for such 1 claimant is entitled by reason of such judgment[.]” 42 U.S.C. § 406(b)(1)(A). A court may award 2 such fees even if the court’s judgment did not immediately result in an award of past-due benefits. 3 Butler v. Colvin, No. 3:14-cv-02050-LB, 2017 WL 446290, at *1 (N.D. Cal. Feb. 2, 2017). 4 Although a district court may award fees under both the EAJA and § 406(b), “‘the claimant’s 5 attorney must refund to the claimant the amount of the smaller fee.’” Crawford v. Astrue, 586 6 F.3d 1142, 1144 n.3 (9th Cir. 2009) (quoting Gisbrecht v. Barnhart, 535 U.S. 789, 796 (2002)). 7 Section 406(b) applies only to fees for representation in federal court—a separate provision allows 8 the SSA to award fees for representation in agency proceedings. See 42 U.S.C. § 406(a); Clark v. 9 Astrue, 529 F.3d 1211, 1215 (9th Cir. 2008). 10 Section 406(b) “does not displace contingent-fee agreements as the primary means by 11 which fees are set for successfully representing Social Security benefits claimants in court.” 12 Gisbrecht, 535 U.S. at 807. “Rather, § 406(b) calls for court review of such arrangements as an 13 independent check, to assure that they yield reasonable results in particular cases.” Id. “The 14 statute does not specify how courts should determine whether a requested fee is reasonable” and 15 “provides only that the fee must not exceed 25% of the past-due benefits awarded.” Crawford, 16 586 F.3d at 1148; see also Gisbrecht, 535 U.S. at 807 (“Congress has provided one boundary line: 17 Agreements are unenforceable to the extent that they provide for fees exceeding 25 percent of the 18 past-due benefits.”). The attorney seeking fees must show that the fees sought are reasonable for 19 the services rendered. Gisbrecht, 535 U.S. at 807. 20 In determining a reasonable fee award under § 406(b), courts “must respect ‘the primacy of 21 lawful attorney-client fee agreements,’ . . . ‘looking first to the contingent fee agreement, then 22 testing it for reasonableness.’” Crawford, 586 F.3d at 1148 (quoting Gisbrecht, 535 U.S. at 793, 23 808). In this context, reasonableness does not depend on lodestar calculations, but upon “the 24 character of the representation and the results the representative achieved.” Gisbrecht, 535 U.S. at 25 808. Fees resulting from a contingent fee agreement are unreasonable and subject to reduction by 26 the court “if the attorney provided substandard representation or engaged in dilatory conduct in 27 order to increase the accrued amount of past-due benefits, or if the ‘benefits are large in 1 (quoting Gisbrecht, 535 U.S. at 808). Although the Supreme Court has “flatly rejected [a] lodestar 2 approach,” id., a court may require, “not as a basis for satellite litigation, but as an aid to the 3 court’s assessment of the reasonableness of the fee yielded by the fee agreement,” submission of 4 the requesting attorney’s records of the hours worked and normal hourly billing rate for non- 5 contingent fee cases. Gisbrecht, 535 U.S. at 808. 6 Here, Mr. Sackett has demonstrated that the requested fees are reasonable for the services 7 rendered. His contingency fee agreement with A.L. provides for fees within the 25% limit 8 imposed by § 406(b). Dkt. No. 28-5. Mr. Sackett successfully pursued A.L.’s appeal in this Court 9 and obtained a favorable result in which A.L. will receive substantial past-due benefits dating back 10 to 2015. See Dkt. No. 28-4 at ECF 3-5. Nothing in the record suggests that Mr. Sackett’s 11 performance was substandard, or that he engaged in dilatory conduct in order to increase the 12 amount of fees to be awarded. See Crawford, 586 F.3d at 1148. 13 Mr. Sackett’s time records, which the Court has reviewed as an aid to the assessment of the 14 reasonableness of the requested fee, indicate that he spent a total of 23.6 hours working on A.L.’s 15 case while it was in this Court, including 19.5 hours reviewing the administrative record and 16 preparing A.L.’s motion and reply in support of the motion for summary judgment. Dkt. No. 28- 17 6. The Court finds that the time spent on substantive matters is reasonable. Moreover, the Court 18 recognizes that Mr. Sackett assumed a risk of not recovering fees by representing A.L. on a 19 contingency basis. See Hearn v. Barnhart, 262 F. Supp. 2d 1033, 1037 (N.D. Cal. 2003) (“The 20 courts recognize that basing a reasonableness determination on a simple hourly rate basis is 21 inappropriate when an attorney is working pursuant to a reasonable contingency contract for 22 which there runs a substantial risk of loss.”). 23 Accordingly, the Court finds that the requested fees are reasonable. Mr. Sackett’s motion 24 for fees therefore is granted. 25 III. CONCLUSION 26 Based on the foregoing, the motion for fees pursuant to 42 U.S.C. § 406(b) is granted. The 27 Court awards $20,111.75 in fees to Mr. Sackett, of Sackett and Associates, which shall be paid out 1 previously awarded. 2 IT IS SO ORDERED. 3 Dated: December 1, 2023 4 2 ‘ Vuiiaguin®, LaMarche VIRGINIA K. DEMARCHI 6 United States Magistrate Judge 7 8 9 10 11 12 13 © 15 16 = 17 Z 18 19 20 21 22 23 24 25 26 27 28