Shultz v. Commissioner of Social Security ( 2020 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 AARON RAY SHULTZ, Case No.: 17cv1823-CAB-MDD 12 Plaintiff, ORDER GRANTING MOTION FOR 13 v. ATTORNEYS’ FEES PURSUANT TO 42 U.S.C. SECTION 406(b) [Doc. No. 14 COMMISSIONER OF SOCIAL 24] SECURITY, 15 Defendant. 16 17 On July 13, 2020, Plaintiff’s counsel filed a motion for attorneys’ fees pursuant to 18 42 U.S.C. § 406(b). [Doc. No. 24.] On July 30, 2020, Defendant filed a response. [Doc. 19 No. 26.] For the reasons set forth below, the motion is GRANTED. 20 BACKGROUND 21 In November 2014, Plaintiff applied to the Social Security Administration (“SSA”) 22 for social security benefits. After an administrative law judge (“ALJ”) denied benefits, 23 Plaintiff appealed the denial to this Court. [Doc. No. 1.] On September 28, 2018, 24 Magistrate Judge Dembin issued a Report and Recommendation (“Report”), 25 recommending that the case be remanded for further administrative action. [Doc. No. 26 20.] On May 18, 2016, this Court issued an order adopting the Report, denying 27 Defendant’s motion for summary judgment, granting in part Plaintiff’s motion for 28 1 summary judgment, and remanding for further proceedings. [Doc. No. 21.] On remand, 2 Plaintiff prevailed, and the Commissioner awarded Plaintiff slightly more than 3 $89,174.00 in total past due benefits. [Doc. No. 24 at 2.] 4 On January 22, 2019, pursuant to a joint motion, this Court awarded Plaintiff 5 $5,850.00 in attorneys’ fees under the Equal Access to Justice Act (“EAJA”). [Doc. No. 6 23.] Plaintiff filed this motion on July 13, 2020, seeking an attorneys’ fees award of 7 $22,293.50 under section 406(b), which represents 25% of the past-due benefits awarded 8 to Plaintiff. [Doc. No. 24.] Under the contingency fee agreement, Plaintiff and his 9 counsel agreed that Plaintiff’s counsel would be paid, pursuant to section 406(b), a 10 maximum of 25% of the past-due benefits awarded to Plaintiff. [Doc. No. 24 at 4, ¶8.] 11 In the motion, Plaintiff’s counsel seeks an order awarding Stuart Barasch, Esq. 12 (Plaintiff’s counsel) attorneys’ fees in the amount of $22,293.50, and further ordering 13 Stuart Barasch to reimburse Aaron Ray Shultz (Plaintiff) the amount of $5,850.00 for the 14 EAJA fees awarded by the Court. [Doc. No. 24 at 2-3.] In the response to the motion, 15 Defendant takes no position on whether the gross fee that Counsel requests under the 16 Social Security Act is reasonable under the case law. [Doc. No. 26 at 5.] 17 LEGAL STANDARD 18 Section 406(b) provides, in relevant part, that “[w]henever a court renders a 19 judgment favorable to a [social security] claimant, ... the court may determine and allow 20 as part of its judgment a reasonable fee” for the claimant's counsel, which can be no more 21 than 25% of the total of past-due benefits awarded to the claimant. 42 U.S.C. § 22 406(b)(1)(A). A court may award such a fee even if the court's judgment did not 23 immediately result in an award of past-due benefits; where the court has rendered a 24 judgment favorable to a claimant by reversing an earlier determination by an ALJ and 25 remanding for further consideration, the court may calculate the 25% fee based upon any 26 past-due benefits awarded on remand. See, e.g., Crawford v. Astrue, 586 F.3d 1142 (9th 27 Cir.2009) (en banc). 28 In considering a motion for attorneys' fees under section 406(b), the court must 1 review counsel's request “as an independent check” to ensure that the contingency fee 2 agreement “yield[s] reasonable results.” See Gisbrecht v. Barnhart, 535 U.S. 789, 807 3 (2002). Section 406(b) “does not displace contingent-fee agreements within the statutory 4 ceiling; instead § 406(b) instructs courts to review for reasonableness fees yielded by 5 those agreements.” Id. at 808–809. To evaluate the reasonableness of a fee request under 6 section 406(b), the court should consider the character of the representation and the 7 results achieved. Id.; see also Crawford, 586 F.3d at 1151. This includes analyzing 8 whether substandard representation justifies awarding less than 25% in fees; any delay in 9 the proceedings attributable to the attorney requesting the fee; whether the benefits of the 10 representation are out of proportion to time spent on the case; and the risk counsel 11 assumed by accepting the case. See Crawford, 586 F.3d at 1151–52 (citing Gisbrecht, 12 535 U.S. at 808). 13 When an attorney receives EAJA fees and 406(b) fees for the same work, he or she 14 must refund the smaller award to his or her client. Thus, attorneys are permitted to seek 15 recovery under both EAJA and Section 406(b), and to keep the larger fee, but they must 16 refund the smaller fee to the claimant. Gisbrecht, 535 U.S. at 796; Parrish v. Comm'r of 17 Soc. Sec., 698 F.3d 1215, 1218 (9th Cir.2012). 18 ANALYSIS 19 The Court finds that Plaintiff's counsel's fee request is reasonable. As an initial 20 matter, the Court notes that the contingency fee agreement between Plaintiff and his 21 counsel is within the statutory ceiling; the agreement provides that if, after judicial review 22 of any adverse ALJ decision, the SSA awards Plaintiff past-due benefits, Plaintiff will 23 pay counsel a fee no greater than 25% of the past-due benefits awarded. [Doc. No. 24-2 24 at ¶3.] 25 Further, the Court finds that Plaintiff’s counsel’s work on this case was not 26 insubstantial: Counsel filed a motion for summary judgment and an opposition to the 27 Defendant’s motion for summary judgment; and he succeeded in having this Court grant 28 his motion and remand the matter to the Commissioner for further proceedings. [Doc. 1 || Nos. 12, 17, 24.] Nothing suggests that Plaintiff's counsel provided substandard 2 || representation, or that Plaintiff's counsel delayed this litigation in order to amass more in 3 || potential fees. And the time Plaintiff's counsel spent on work before this Court— 4 || approximately 30.5 hours of attorney time —is not out of proportion to the fee award. 5 ||See Doc. No. 24 at 3-5; cf: Crawford, 586 F.3d at 1145 (awarding $21,000 in fees where 6 || fees represented 19.5 attorney-hours and 4.5 paralegal-hours of work); Macewen v. 7 || Colvin, 10cv1263-JLS-MDD, 2016 WL 6082308 (S.D. Cal. October 18, 2016)(awarding 8 || $21,808.50 in fees for 35.2 hours of attorney and paralegal work). Finally, the Court 9 || finds that Plaintiff's counsel assumed a substantial risk of not recovering attorneys’ fees. 10 || At the time that Plaintiff and his counsel signed the contingency fee agreement, Plaintiff 11 an unfavorable ruling from the ALJ and had just filed this action for judicial review. 12 ||[Doc. No. 24-2.] 13 After a review of the record, the Court finds the fee request reasonable and that it 14 || does not constitute a “windfall” to Plaintiff's counsel. See Gisbrecht, 535 U.S. 789. 15 CONCLUSION 16 For the reasons set forth above, the Court GRANTS Plaintiff’?s counsel’s motion 17 || for attorneys’ fees pursuant to 42 U.S.C. §406(b). The Court AWARDS Stuart Barasch, 18 || Esq. attorneys’ fees in the amount of $22,293.50.00. The Court HEREBY ORDERS 19 || Stuart Barasch to reimburse Aaron Ray Shultz the amount of $5,850.00 for EAJA fees 20 || awarded by this Court. 21 IT IS SO ORDERED. |!Dated: August 14, 2020 Ky 23 Hon. Cathy Ann Bencivengo 24 United States District Judge 25 26 27 28