Flaherty v. Astrue

Filing 31

ORDER granting Plaintiff's 28 Motion for an Award of Attorney's Fees Under 42 U.S.C. § 406(b). Counsel's fees are approved in the amount of $21,750.00. (See document for full details). Signed by Senior Judge James A Teilborg on 9/27/13. (LAD)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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Daniel Flaherty,
No. CV 09-08106-PHX-JAT

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Plaintiff,

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v.

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Carolyn W. Colvin, Acting
Commissioner of Social Security,

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ORDER

Defendant.

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Pending before the Court is Plaintiff’s Motion for Attorneys’ Fees (Doc. 28).

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Plaintiff has also filed a supporting memorandum of points and authorities (Doc. 29) and a

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supplement to his motion (Doc. 30). Plaintiff’s motion is unopposed by Defendant.

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I.

BACKGROUND

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Plaintiff originally filed applications for a period of disability and disability

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insurance benefits under Title II of the Social Security Act before the Commissioner of

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Social Security.

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reconsideration. Plaintiff’s application was then denied by an Administrative Law Judge

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(“ALJ”).

Plaintiff’s Title II application was denied initially and again on

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Following Plaintiff’s denial by the ALJ, Plaintiff hired counsel to represent him on

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appeal to the Social Security Appeals Council. The Appeals Council denied Plaintiff’s

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request for review. Plaintiff subsequently hired counsel to file an appeal before this Court

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and counsel filed a complaint on June 19, 2009. (Doc. 1). Plaintiff and counsel entered

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into a fee agreement for counsel’s work before the Court. (Doc. 29-2). The agreement

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provides that counsel will be paid 25% of any past due benefits which Plaintiff is

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eventually awarded.

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On June 28, 2010, the Court vacated the Commissioner’s decision and remanded

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Plaintiff’s claim for further proceedings. (Doc. 16). On September 9, 2010, the Court

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awarded Plaintiff’s counsel $4,975.00 under the Equal Access to Justice Act (“EAJA”)

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and ordered that this award of EAJA fees does not preclude Plaintiff’s counsel from

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seeking additional attorney fees under 42 U.S.C. § 406(b), subject to the offset provision

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of the law. (Doc. 26 at 2).

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On remand before the Commissioner, Plaintiff was eventually awarded $94,791.00

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in past due benefits on May 1, 2013. (Doc. 29-4). This award was for past due benefits

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from November 2005 to June 2012. (Id. at 3).

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On June 28, 2013, Plaintiff’s counsel filed the pending motion for an award of

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attorney’s fees. (Doc. 28). On August 27, 2013, Plaintiff’s counsel filed a supplement to

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his motion informing the Court that the ALJ had approved a fee request of $10,000.00 for

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time counsel spent representing Plaintiff before the Social Security Administration. (Id. at

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1). Plaintiff’s counsel has also submitted a letter from Plaintiff informing the Court that

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Plaintiff has reviewed the fee petition which counsel filed with this Court, that Plaintiff

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understands the amount counsel is requesting, and that Plaintiff agrees with counsel’s fee

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request. (Doc. 30-2).

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II.

ANALYSIS

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Section 406(b) provides that whenever the Court renders a favorable judgment to a

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social security claimant, the Court can award reasonable attorneys’ fees for representation

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of the claimant. 42 U.S.C. § 406(b)(1)(A). The reasonable fee cannot exceed twenty-five

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percent of the total past-due benefits awarded to the claimant. Id. The fee is payable out

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of, and not in addition to, the amount of the past-due benefits. Id. Section 406(b) “does

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not displace contingent-fee agreements as the primary means by which fees are set for

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successfully representing Social Security benefits claimants in court. Rather, § 406(b)

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calls for court review of such arrangements as an independent check, to assure that they
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yield reasonable results in particular cases.” Gisbrecht v. Barnhart, 535 U.S. 789, 807

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(2002).

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Agreements are unenforceable to the extent that they provide for fees exceeding 25

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percent of the past-due benefits.” Id. Therefore, the Court must ensure the fee is 1)

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reasonable, and 2) limited to 25 percent of past-due benefits.

The Supreme Court noted that “Congress has provided one boundary line:

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This Court must first “respect the primacy of lawful attorney-client fee

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agreements.” Crawford v. Astrue, 586 F.3d 1142, 1150 (9th Cir. 2009) (en banc) (internal

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quotations omitted). While looking first to this agreement, this Court must still test the

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resulting award for reasonableness. Id. at 1149. In other words, “the district court must

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first look to the fee agreement and then adjust downward if the attorney provided

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substandard representation or delayed the case, or if the requested fee would result in a

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windfall.” Id. at 11511. In considering reasonableness this Court should consider the

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following non-exhaustive factors: the character of the representation, the results achieved,

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performance, delay, whether the benefits were proportionate to the time spent on the case,

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and, as an aid if necessary, the lodestar calculation. Id.

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Plaintiff and his counsel had a contingent-fee agreement in this case typical of fee

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agreements in disability benefit cases.

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Plaintiff “agree[s] to pay [counsel] as [counsel’s] attorney’s fee 25% of any past due

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benefits which [Plaintiff] or [Plaintiff’s] family receives on behalf of [Plaintiff’s] Social

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Security Disability Claim in the event [Plaintiff’s] case is won.” (Doc. 29-2). Plaintiff

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was awarded $94,791.00 in past due benefits. (Doc. 29-4). Twenty-five percent of this

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award is $23,697.75. Plaintiff’s counsel has requested $21,750.00. (Doc. 29 at 11).

The contingent-fee agreement provides that

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While counsel has been authorized to charge Plaintiff $10,000.00 for attorney’s

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fees by the Social Security Administration for time spent working on Plaintiff’s claim

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before the Commissioner (Doc. 30-1), this amount is not part of the 25 percent authorized

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by section 406(b). See Clark v. Astrue, 529 F.3d 1211, 1215-16 (9th Cir. 2008) (“an

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“In the event the court chooses not to give effect to the terms of the agreement, it should
state for the record the deduction being made and the reasons therefor[ ].” Crawford, 586
F.3d at 1151 (quoting Rodriquez v. Bowen, 865 F.2d 739, 746 (6th Cir. 1989) (en banc)).
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award of attorney's fees under § 406(b) is separate from, and in addition to, any fees

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awarded by the Administration under § 406(a)”).

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Plaintiff’s counsel argues that the award issued by the Social Security

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Administration erroneously calculates the past due benefits as only covering the period

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from November 2005 through June 2012. (Doc. 29 at 3). Counsel contends that the past

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due benefits should actually cover the period from March 2005 to December 2012 and this

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amount would be $127,026.00. (Id.). Twenty-five percent of this amount is $31,756.50.

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However, the Social Security Administration has awarded Plaintiff $94,791.00 in past due

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benefits, not $127,026.00. (Doc. 29-4). The Court will not change this award.

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The Court finds $21,750.00 is also a reasonable amount given the factors outlined

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in Crawford v. Astrue. See 586 F.3d at 1151.

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III.

CONCLUSION

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Based on the foregoing,

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IT IS ORDERED that Plaintiff’s Motion for an Award of Attorney’s Fees Under

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42 U.S.C. § 406(b) (Doc. 28) is granted. Counsel’s fees are approved in the amount of

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$21,750.00.

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Dated this 27th day of September, 2013.

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