Pronovost v. Astrue

Filing 23

ORDER granting in part and denying in part 19 Plaintiff's Attorney's Motion for Award of Attorney's Fees Under 42 U.S.C. § 406(b). See order for details. Signed by Senior Judge Frederick J Martone on 12/22/2014.(LMR)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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Plaintiff,
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vs.
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Carolyn W. Colvin, Acting Comm’r of the)
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Social Security Admin.,
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Defendant.
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Melissa Marie Pronovost,

No. CV-12-1168-PHX-FJM
ORDER

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Before the court is plaintiff’s motion for an award of attorney’s fees (doc. 19) and

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memorandum in support (doc. 20), defendant’s response (doc. 21), and plaintiff’s reply (doc.

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22).

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This is a motion for an award of attorney’s fees pursuant to 42 U.S.C. § 406(b) of the

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Social Security Act. Section 406(a) governs fees for representation of a Social Security

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claimant in administrative proceedings, and § 406(b) applies to fees for representation before

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a court. In contrast to fees awarded under fee-shifting statutes such as 42 U.S.C. § 1988, §

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406(b) fees are not paid by the losing party but by the prevailing claimant out of the past-due

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benefits awarded. Gisbrecht v. Barnhart, 535 U.S. 789, 795, 122 S. Ct. 1817, 1822 (2002).

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On March 15, 2013, we granted the Commissioner’s motion to vacate the agency

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decision denying benefits and to remand the matter for further administrative proceedings

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(doc. 17). On remand, the administrative law judge granted plaintiff’s application for

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disability insurance benefits and awarded past and future benefits.

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Pursuant to § 406(b), when a claimant obtains a favorable judgment under the Social

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Security Act, “the court may determine and allow as part of its judgment a reasonable fee for

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. . . representation [before the court], not in excess of 25 percent of the total of the past-due

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benefits.” Id. § 406(b)(1)(A). The award of attorney’s fees must not only be within the 25%

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maximum, but it must be “reasonable for the services rendered.” Gisbrecht, 535 U.S. at 807,

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122 S. Ct. at 1828. The court provides “an independent check” to ensure that contingency

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fee agreements between Social Security claimants and their lawyers will “yield reasonable

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results in particular cases.” Id. Claimant’s counsel bears the burden of showing that the

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statutory requirement of reasonableness has been satisfied. Id.

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Here, plaintiff retained counsel under a contingency fee agreement whereby plaintiff

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agreed to pay counsel 25% of any past-due benefits recovered. Plaintiff’s counsel now seeks

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fees under § 406(b) in the amount of $31,707.50, representing 25% of the past due benefits

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awarded. Because § 406(b) fees are payable out of the award of past-due benefits, the

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Commissioner has no direct financial stake in the decision to award fees, and accordingly the

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Commissioner declined to assert a position on either the propriety or the amount of the

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requested fee (doc. 21).

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We must “approach [a § 406(b)] fee determinations by looking first to the contingent-

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fee agreement, then testing it for reasonableness.” Gisbrecht, 535 U.S. 808, 122 S. Ct. at

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1828. There is nothing inherently unreasonable in the 25% contingency-fee agreement

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between plaintiff and her counsel. In fact, agreements providing for fees of 25% of past-due

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benefits are the “most common fee arrangement between attorneys and Social Security

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claimants.” Id. at 800, 122 S. Ct. at 1824. Therefore, on its face, the fee agreement is

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reasonable.

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However, we must also test the resulting fee award for reasonableness under the

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circumstances of the particular case. A fee resulting from a contingent-fee arrangement is

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unreasonable and therefore subject to reduction by the court if the lawyer provided

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substandard representation, delayed the case in order to increase the accrued amount of past-2-

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due benefits, or, as is most relevant here, if the requested fee is “large in comparison to the

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amount of time counsel spent on the case.” Id. at 808, 122 S. Ct. at 1828. Although “the

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Supreme Court flatly rejected [the] lodestar approach” to § 406(b) fees, Crawford v. Astrue,

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586 F.3d 1142, 1148 (9th Cir. 2009), we nonetheless will consider lodestar factors (hourly

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rates and reasonable hours expended) in determining whether a requested § 406(b) fee is

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reasonable in a particular case. Gisbrecht, 535 U.S. at 808, 122 S. Ct. at 1828-29.

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Here, counsel expended 40.7 hours of work in the district court, resulting in an hourly

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rate of $779.05. We recognize that the equivalent hourly rate of a contingent fee is often

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greater than a lodestar fee because the contingent fee method often compensates attorneys

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for the risk undertaken in representing clients on a contingency basis. Crawford, 586 F.3d

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at 1150. But in this particular case, counsel did not assume a significant risk in accepting

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representation given that the Commissioner readily acknowledged error and requested a

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reversal and remand.

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Unlike the lawyers in Crawford, plaintiff’s counsel in this case did not voluntarily

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reduce his fee request from the 25% contracted rate based on his own evaluation of the fees

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sought in comparison to the amount of time spent on the case. See id. at 1151-52. Instead,

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counsel seeks the full 25% of past-due benefits awarded. But under the circumstances of this

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case, an hourly rate of almost $800 is excessive. Given the minimal amount of work

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performed or risk assumed by counsel in the district court proceedings, we conclude that an

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award of fees in the amount of 10% of the past-due benefits, or $12,683.00 is reasonable

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(resulting in an hourly rate of $311.62).

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IT IS ORDERED GRANTING IN PART AND DENYING IN PART plaintiff’s

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motion for an award of attorney’s fees pursuant to 42 U.S.C. § 406(b) and awarding fees in

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the amount of $12,683.00 (doc. 19).

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DATED this 22nd day of December, 2014.

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