Gaynell Delaney v. Nancy A. Berryhill

[6] UNITED STATES DISTRICT COURT [7] CENTRAL DISTRICT OF CALIFORNIA [9] 10 GAYNELL D.,1 Case No. CV 17-9286-KK [11] Plaintiff, 12 v. ORDER GRANTING MOTION FOR ATTORNEY FEES PURSUANT TO 42 13 U.S.C. § 406 (B) ANDREW SAUL,2 Commissioner of 14 Social Security, 15 Defendant. [17] 18 I. 19 INTRODUCTION 20 Plaintiff Gaynell D. (“Plaintiff”)’s counsel, Andrew T. Koenig (“Counsel”), 21 filed a Corrected Motion (“Corrected Motion”) for Attorney Fees Pursuant to 42 22 U.S.C. § 406 (b) (“Section 406(b)”). The Corrected Motion seeks an award of 23 $10,439.12 for representing Plaintiff in an action to obtain disability insurance benefits 24 with a refund to Plaintiff of $3,300.00 for the Equal Access to Justice Act (“EAJA”) [25] 26 1 Partially redacted in compliance with Federal Rule of Civil Procedure 5.2(c)(2)(B) and the recommendation of the Committee on Court Administration and Case 27 Management of the Judicial Conference of the United States. 1 fees previously awarded. The parties have consented to the jurisdiction of the 2 undersigned United States Magistrate Judge, pursuant to 28 U.S.C. § 636 (c). For the 3 reasons stated below, the Court GRANTS the Corrected Motion. 4 II. 5 RELEVANT BACKGROUND 6 On December 29, 2017, Plaintiff filed the Complaint in this action. ECF 7 Docket No. (“Dkt.”) 1, Compl. Plaintiff alleged the Commissioner of the Social 8 Security Administration (“Defendant”) improperly denied Plaintiff’s application for 9 Title II Disability Insurance Benefits (“DIB”) and Title XVI Supplemental Security 10 Income (“SSI”). Id. at 1-2 . On June 15, 2018, pursuant to the parties’ Stipulation to 11 Remand, dkt. 18, the Court entered Judgment remanding the case for further 12 administrative proceedings. Dkt. 19, Order; Dkt. 20, Judgment. 13 On July 19, 2018, the Court issued an order approving the parties’ stipulation 14 awarding EAJA fees to Counsel in the amount of $3,300.00. Dkt. 22, Order 15 Approving EAJA Fees. 16 On October 11, 2019, Counsel filed the instant Corrected Motion3 for 17 Authorization of Attorney’s Fees Pursuant to Section 406(b) seeking attorney’s fees in 18 the amount of $10,439.12 with a reimbursement to Plaintiff in the amount of 19 $3,300.00 for the EAJA fees previously paid. Dkt. 24, Mot. Counsel states 20.1 hours 20 of attorney and paralegal time were spent representing Plaintiff in federal court. Dkt. 21 24 at 7-11, Declaration of Andrew T. Koenig (“Koenig Decl.”), ¶ 7-9. Counsel seeks 22 compensation pursuant to a contingency agreement dated December 14, 2017, which 23 provides if Plaintiff prevails in federal court, Counsel “is entitled to 25% of the lump24 sum back-due benefits awarded to Client and his/her family.” Koenig Decl., ¶ 5; 25 Dkt., 24-2, Attorney’s Fee Agreement at ¶ 3. [26] 3 On the same date, prior to filing the Corrected Motion, Counsel filed a separate [27] Motion for Attorney’s Fees Pursuant to Section 406(b), seeking the same amount and 1 On October 11, 2019, Counsel served Plaintiff with the Corrected Motion and 2 informed her that she had a right to file a response to the Corrected Motion. Dkt. 24 3 at 11, Proof of Service; Dkt. 24, Mot. at 2. Plaintiff has not filed a response. 4 On October 22, 2019, Defendant filed a Response to the Corrected Motion. 5 Dkt. 25. Defendant “takes no position on the reasonableness of the request” of the 6 $10,439.12 fee but provides an analysis of the fee request based on Defendant’s role 7 “resembling that of a trustee for the claimants.” Id. at 5 . 8 Thus, the Court deems this matter submitted. 9 III. 10 DISCUSSION 11 A. APPLICABLE LAW 12 Pursuant to Section 406(b): 13 Whenever a court renders a judgment favorable to a claimant under this 14 subchapter who was represented before the court by an attorney, the 15 court may determine and allow as part of its judgment a reasonable fee 16 for such representation, not in excess of 25 percent of the total of the 17 past-due benefits to which the claimant is entitled by reason of such 18 judgment, and the Commissioner of Social Security may . . . certify the 19 amount of such fee for payment to such attorney out of, and not in 20 addition to, the amount of such past-due benefits. [21] 42 U.S.C. § 406 (b)(1)(A). Thus, “a prevailing [disability] claimant’s [attorney’s] fees 22 are payable only out of the benefits recovered; in amount, such fees may not exceed 23 25 percent of past-due benefits.” Gisbrecht v. Barnhart, 535 U.S. 789, 792 , 122 S. Ct. 24 1817, 152 L. Ed. 2d 996 (2002). 25 Where a claimant entered into a contingent fee agreement with counsel, a court 26 must apply Section 406(b) “to control, not to displace, fee agreements between Social 27 Security benefits claimants and their counsel.” Id. at 793 . A court should not use a 1 multiplying the reasonable hourly rate by the number of hours reasonably expended 2 on the case.” Crawford v. Astrue, 586 F.3d 1142, 1148 (9th Cir. 2009) (en banc). 3 Rather, where the claimant and counsel entered into a lawful contingent fee 4 agreement, courts that use the “lodestar” method as the starting point to determine 5 the reasonableness of fees requested under Section 406(b) improperly “reject the 6 primacy of lawful attorney-client fee agreements.” Gisbrecht, 535 U.S. at 793 . Thus, 7 courts should not apply lodestar rules in cases where the claimant and counsel reached 8 a contingent fee agreement because: 9 [t]he lodestar method under-compensates attorneys for the risk they 10 assume in representing [social security] claimants and ordinarily produces 11 remarkably smaller fees than would be produced by starting with the 12 contingent-fee agreement. A district court’s use of the lodestar to 13 determine a reasonable fee thus ultimately works to the disadvantage of 14 [social security] claimants who need counsel to recover any past-due 15 benefits at all. 16 Crawford, 586 F.3d at 1149 . 17 However, even in contingency fee cases, a court has “an affirmative duty to 18 assure that the reasonableness of the fee [asserted by counsel] is established.” Id. The 19 court must examine “whether the amount need be reduced, not whether the lodestar 20 amount should be enhanced.” Id. The court may consider factors such as the 21 character of the representation, the results achieved, the ratio between the amount of 22 any benefits awarded and the time expended, and any undue delay attributable to 23 counsel that caused an accumulation of back benefits in determining whether a lawful 24 contingent fee agreement is reasonable. See Gisbrecht, 535 U.S. at 808 ; Crawford, [25] 586 F.3d at 1151 . 26 Additionally, the Court must determine whether a previously awarded EAJA 27 fee should be refunded to Plaintiff in the event both Section 406(b) and EAJA fees 1 fees payable under § 406(b) out of the claimant’s past-due Social Security benefits in 2 this manner: Fee awards may be made under both prescriptions, but the claimant’s 3 attorney must ‘refun[d] to the claimant the amount of the smaller fee.’” Gisbrecht, [4] 535 U.S. at 796 . 5 B. ANALYSIS 6 Here, Counsel seeks a reasonable fee under Section 406(b). Plaintiff retained 7 Counsel to represent her in federal court in her appeal from the administrative denial 8 of benefits and agreed to pay Counsel a contingent fee of twenty-five percent of any 9 past due benefits obtained for work performed in court. See Koenig Decl., ¶ 5; Dkt., 10 24-2, Attorney’s Fee Agreement at ¶ 3. Consideration of the factors set forth in 11 Gisbrecht and Crawford warrants no reduction of the fee Counsel seeks. 12 The record discloses no issue regarding the quality or efficiency of Counsel’s 13 representation before this Court, or any misconduct or delay by Counsel. Counsel 14 obtained a favorable outcome for Plaintiff, ultimately resulting in a remand for further 15 administrative proceedings and an award of past due benefits. See Dkt. 20, Judgment; 16 Koenig Decl., ¶¶ 10; Dkt. 24-1, Notice of Award. Further, the time expended to 17 litigate this case, i.e. 20.1 hours, was reasonable and within the approved range for 18 social security disability cases. See Patterson v. Apfel, 99 F. Supp. 2d 1212 , 1214 & 19 n.2 (C.D. Cal. 2000) (noting that “a survey of several dozen cases in which attorney’s 20 fees were awarded in social security cases suggests that the 33.75 hours spent by 21 plaintiff’s counsel falls within the approved range”). 22 In addition, a fee of $10,439.12 based on 20.1 hours of attorney time is 23 reasonable. See Koening Decl., ¶ 7-9. The Court finds Counsel’s effective hourly rate 24 of approximately $519.364 reasonable under the circumstances. See Villa v. Astrue, 25 No. CIV S-06-0846 GGH, 2010 WL 118454 , at *1-2 (E.D. Cal. Jan. 7, 2010) 26 (approving Section 406(b) fees exceeding $1,000.00 per hour, and noting “[r]educing [27] 1 [Section] 406(b) fees after Crawford is a dicey business”). Further, post-Gisbrecht 2 decisions have approved contingency fee agreements yielding similar hourly rates to 3 the rate Counsel seeks. See, e.g., Daniel v. Astrue, No. EDCV 04-01188-MAN, 2009 4 WL 1941632 , at *2-3 (C.D. Cal. July 2, 2009) (approving fees amounting to $1,491.25 5 per hour); see also Palos v. Colvin, No. CV 15-04261-DTB, 2016 WL 5110243 , at *2 6 (C.D. Cal. Sept. 20, 2016) (finding “an hourly rate of $1,546.39 for attorney and 7 paralegal services” is reasonable). Hence, in light of the hours Counsel expended, the 8 Section 406(b) fee award amount Counsel requests would not represent an unfair 9 windfall to Counsel. 10 Additionally, nothing in the record suggests any overreaching in the making of 11 the fee agreement or any impropriety on the part of Counsel in representing Plaintiff. 12 Counsel assumed the risk of nonpayment inherent in a contingency agreement and 13 Counsel’s efforts proved successful for Plaintiff. Accordingly, the Court finds the 14 Section 406(b) fees Counsel requests reasonable. 15 IV. 16 ORDER 17 Based on the foregoing, IT IS HEREBY ORDERED (1) Counsel’s Motion 18 for Attorney Fees Pursuant to Section 406(b) is GRANTED; (2) Defendant is 19 directed to pay Counsel the sum of $10,439.12 with a reimbursement to Plaintiff for 20 EAJA fees previously awarded in the amount of $3,300.00. [21] 22 Dated: November 06, 2019 23 HONORABLE KENLY KIYA KATO United States Magistrate Judge