Loveless

Filing 36

ORDER AND OPINION, counsel's Motion/Petition 31 for approval of fees is granted as follows: counsel's fees are approved in the amount of $20,000; Counsel shall refund to plaintiff $4,880.32, the amount of the EAJA award, from the approved $20,000 award. Signed by Judge John W Sedwick on 4/10/12.(REW)

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UNITED STATES DISTRICT COURT

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DISTRICT OF ARIZONA

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STACEY D. LOVELESS,
Plaintiff,

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vs.
MICHAEL J. ASTRUE,

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Defendant.
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2:09-cv-00830 JWS
ORDER AND OPINION
[Re: Motion at Docket 31]

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I. MOTION PRESENTED
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At docket 31, plaintiff’s counsel petitions pursuant to 42 U.S.C. § 406(b) for
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approval of attorney’s fees. The Commissioner responds at docket 32. Plaintiff’s
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counsel filed documents supporting the motion at dockets 33 and 35.
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II. STANDARD OF REVIEW
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Section 406(b) of Title 42 provides that “[w]henever a court renders a judgment
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favorable to a claimant . . . who was represented before the court by an attorney, the
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court may determine and allow as part of its judgment a reasonable fee for such
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representation, not in excess of 25 percent of the total of the past-due benefits to which
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the claimant is entitled by reason of such judgment.”1 Section 406(b) “does not displace

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contingent-fee agreements . . . [r]ather, § 406(b) calls for court review of such

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arrangements as an independent check, to assure that they yield reasonable results in

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particular cases.”2 “Within the 25 percent boundary . . . the attorney for the successful

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claimant must show that the fee sought is reasonable for the services rendered.”3

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When fees have already been awarded to a prevailing claimant pursuant to the

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Equal Access to Justice Act (“EAJA”),4 the claimant’s attorney must refund the smaller

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fee.5 The “EAJA award [therefore] offsets an award under Section 406(b), so that the

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amount of the total past-due benefits the claimant actually receives will be increased by

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the EAJA award up to the point the claimant receives 100 percent of the past-due

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benefits.”6

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“A fee resulting from a contingent-fee agreement is unreasonable, and thus

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subject to reduction by the court, if the attorney provided substandard representation or

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engaged in dilatory conduct in order to increase the accrued amount of past-due

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benefits, or if the benefits are large in comparison to the amount of time counsel spent

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on the case.”7 “If the benefits are large in comparison to the amount of time counsel

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spent on the case, a downward adjustment is similarly in order.”8

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42 U.S.C. § 406(b).

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Gisbrecht v. Barnhart, 535 U.S. 789, 807 (2002).

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Id.

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94 Stat. 2329, as amended, 28 U.S.C. § 2412.

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Gisbrecht 535 U.S. at 797.

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Id.
Crawford v. Astrue, 586 F.3d 1142, 1148 (9th Cir. 2009).
Gisbrecht, 535 U.S. at 808.

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III. DISCUSSION

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A. The Contingent-Fee Agreement
“Courts must approach § 406(b) fee determinations by looking first to the

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contingent-fee agreement, then testing it for reasonableness.”9 Loveless agreed that

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counsel should be paid 25 percent of all back benefits “unless the SSA or a court

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decides he should be paid less.”10 On remand, Loveless was awarded $165,429.00 in

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past-due benefits.11 Twenty-five percent of that amount is $41,457.25.

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B. Reasonableness

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Loveless’ counsel requests a total award of $26,119.68. That figure reflects

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counsel’s request for $31,000 pursuant to § 406(b), offset by the $4,880.32 previously

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awarded under the EAJA.12 Plaintiff’s counsel has provided records indicating that he

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spent 29.7 hours on plaintiff’s case. His requested award of $31,000 therefore

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represents an hourly rate of $1,043.77. The court concludes that such an award is

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excessive and therefore unreasonable.

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Under ordinary circumstances, the court would give nearly conclusive weight to

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the prevailing rate in the relevant market. Under these circumstances, however, such

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an estimate would not give adequate consideration to the risk that plaintiff’s counsel

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took in undertaking the contingent fee arrangement. The court concludes that an award

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of $20,000 is appropriate. Although $20,000 represents a high hourly rate–almost

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$700–it accounts for the risk that plaintiff’s counsel took, counsel’s experience in the

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field, and the favorable disposition of plaintiff’s claim. After refund of the $4,880.32

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EAJA award, counsel’s fee recovery would total $15,119.68.

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Crawford v. Astrue, 586 F.3d 1142, 1149 (9th Cir. 2009) (quoting Gisbrecht v. Barnhart,
535 U.S. 789, 808 (2002)).

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Doc. 35 at 1.
Doc. 33-1 at 3.
See doc. 29.

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IV. CONCLUSION
For the reasons above, counsel’s petition for approval of fees is GRANTED as

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follows: counsel’s fees are approved in the amount of $20,000. Counsel shall refund to

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plaintiff $4,880.32, the amount of the EAJA award, from the approved $20,000 award.

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DATED this 10th day of April 2012.

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/s/
JOHN W. SEDWICK
UNITED STATES DISTRICT JUDGE

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