Snyder v. Commissioner of Social Security Administration

Filing 20

ORDER Plaintiff's 18 Application for Award of Attorney's Fees and Costs under 42 U.S.C. § 406(b) of the Social Security Act is GRANTED IN PART to the extent that Plaintiff's counsel is AWARDED $2,250.00 in attorney's fees. Plaintiff's Motion is DENIED to the extent that he seeks an award of fees in excess of $2,250.00. The Clerk of Court is DIRECTED to amend the judgment in this matter accordingly. Signed by Magistrate Judge Bernardo P Velasco on 2/14/2018. (KEP)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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Alan Snyder,

No. CV 15-00516-TUC-BPV
Plaintiff,

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v.

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ORDER

Nancy A. Berryhill, Acting Commissioner
of Social Security Administration,

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Defendant.

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Pending before the Court is Plaintiff’s Application for Award of Attorney’s Fees

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and Costs under 42 U.S.C. '406(b) of the Social Security Act with accompanying

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exhibits. (Doc. 18). Defendant has filed a Response in opposition (Doc. 19). For the

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following reasons, the Court grants Plaintiff’s Motion in part.

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I.

Discussion

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Plaintiff filed this action in November 2015, seeking review of the denial of his

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application for benefits under the Social Security Act for disability and supplemental

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security income. (Doc. 5). Thereafter, the parties stipulated to remand the matter to the

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Administrative Law Judge for further proceedings, and the Court remanded the matter

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pursuant to the stipulation. (Docs. 15, 16). Upon remand, Plaintiff was granted disability

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benefits.

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Plaintiff now seeks attorney’s fees in the amount of $12,155.85 pursuant to 42

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U.S.C. § 406(b). The record reflects that the Court has not previously awarded attorney’s

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fees pursuant to the Equal Access to Justice Act (“EAJA”), 28 U.S.C. § 2412(d).

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Plaintiff’s counsel, Amy Foster, states that “considering the risks and benefits, the

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reasonable hourly billing rate for an attorney with 14 years of legal experience who

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handles cases on a contingency basis is in excess of $500.00 per hour. This rate has been

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found reasonable by District Courts throughout the Country.” (Doc. 18-1 at ¶5). Ms.

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Foster also indicates that Plaintiff entered a 25% contingency fee agreement. (Doc. 18-1

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at ¶9; see also Doc. 18-3).

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Defendant objects to the amount of fees sought given that Ms. Foster spent only

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three hours litigating the case in federal court. (Doc. 19). Defendant points out that

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“[f]or 3 hours of work before the district court, a fee of $12,155.85 would amount to an

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hourly rate of $4,051.95, in a case where the parties were able to reach a stipulated

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settlement agreement for remand without the need for Plaintiff’s attorney to draft an

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opening brief.” (Id. at 4). Defendant contends that an award of more than $2,250.00, i.e.,

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$750.00 per hour, would constitute an improper windfall under § 406(b). Plaintiff did not

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file a Reply and, thus, has not objected to the government’s position.

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Section 406 sets forth “the exclusive regime for obtaining fees for successful

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representation of Social Security benefits claimants.” Gisbrecht v. Barnhart, 535 U.S.

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789, 795-96 (2002). Section 406(b), “controls fees for representation . . .” before the

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court. Id. at 794. Pursuant to § 40b(b), “[w]henever a court renders a judgment favorable

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to a claimant under this subchapter who was represented before the court by an attorney,

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the 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[.]” 42 U.S.C. § 406(b)(1)(A).

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The record reflects that Plaintiff entered into a contingent-fee agreement wherein

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he agreed to pay attorney’s fees not to exceed 25%. (Doc. 18-3). The Supreme Court,

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when discussing the term “reasonable fee” as used in § 406(b), concluded that “§ 406(b)

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

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for 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, 535 U.S. at 807 (footnote

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omitted). The Court also pointed out that “Congress has provided one boundary line:

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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.”

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omitted). In assessing reasonableness of the fee sought, district courts should consider the

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results achieved and may properly apply a reduction if the attorney provided substandard

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representation or engaged in dilatory conduct in order to increase the accrued amount of

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past-due benefits, or if the benefits are out of proportion to the time spent on the case,

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thereby resulting in a windfall to counsel. Crawford v. Astrue, 586 F.3d 1142, 1148,

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1151 (9th Cir. 2009) (citing Gisbrecht, 535 U.S. at 808) see also Gisbrecht, 535 U.S. at

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808. (the court should “disallow windfalls for lawyers” (internal quotation marks and

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citation omitted)). In making its assessment, the district court may consider the lodestar

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calculation as an aid, if necessary. Crawford, 586 F.3d at 1148. The attorney bears the

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burden of establishing that the fee sought is reasonable. Id. (citing Gisbrecht, 535 U.S. at

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807).

Id. (citing 42 U.S.C. § 406(b)(1)(A)) (footnote

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In applying Gisbrecht, the Ninth Circuit has emphasized that district courts “must

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respect ‘the primacy of lawful attorney-client fee agreements, . . . looking first to the

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contingent-fee agreement, then testing it for reasonableness.’” Crawford, 586 F.3d at

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1148 (quoting Gisbrecht, 535 U.S. at 793, 808). Here, the fee agreement between

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Plaintiff and counsel provided for a 25% contingency fee consistent with Gisbrecht. The

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parties do not dispute that the $12,155.85 sought by Plaintiff’s counsel constitutes 25% of

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the past-due amount awarded to Plaintiff.

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With regard to the reasonableness of the fees sought, Defendant correctly points

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out that counsel can only receive fees for “the attorney’s work before a federal court on

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behalf of the Social Security claimant in connection with the action that resulted in past-

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due benefits.” Parrish v. Commissioner of Social Sec. Admin., 698 F.3d 1215, 1220 (9th

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Cir. 2012); cf. Clark v. Astrue, 529 F.3d 1211, 1215 (9th Cir. 2008) (“the plain text of §

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406(b) limits only the award of attorney’s fees for representation of a Social Security

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claimant before the district court . . . .”). Plaintiff’s counsel has submitted a time record

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indicating that she seeks compensation for time spent on the case during the

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administrative proceeding after this Court remanded the matter. (Doc. 18-2). Counsel’s

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time spent on the matter in administrative proceedings subsequent to the remand order

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does not fall within the ambit of § 406(b). Cf. Parrish, 698 F.3d at 1220-21. The time

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record reflects that Plaintiff’s counsel spent 3.0 hours working on the case before this

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Court. (18-2 (entries from October 2, 2015 through March 16, 2016)).

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On the instant record, there is no indication of any substandard performance by

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Plaintiff’s counsel or that she engaged in any unreasonable delay. Instead, counsel

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achieved a favorable result for Plaintiff and should be compensated to recognize the risks

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attendant to contingent fee litigation. Although Plaintiff’s counsel states that a fee in

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excess of $500.00 per hour is reasonable, she provides no support for the conclusion that

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over $4,000 per hour is a reasonable amount in this case. Plaintiff’s counsel has the

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burden to establish the reasonableness of the fees sought. Gisbrecht, 535 U.S. at 807.

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The government has asserted that an hourly rate of $750.00 in this case is

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reasonable, and Plaintiff has not objected. The amount suggested by the government is

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more than double the $250.00 rate that attorneys practicing disability law in the District

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of Arizona are awarded “per hour on Court Long Term Disability claims.” (Doc. 18-1 at

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¶7). “In cases of this type, the Ninth Circuit sitting en banc has approved effective hourly

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rates of $519, $875, and $902 without finding that they are unreasonable.” Young v.

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Colvin, 2014 WL 590335, *1 (D. Ariz. Feb. 14, 2014) (citing Crawford, 586 F.3d at

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1153). Thus, upon consideration of the Gisbrecht reasonableness factors, in addition to

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the risk involved in the contingency fee arrangement in this case, the Court concludes

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that a fee award of $2,250.00 is reasonable in this case. Any greater award would result

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in an improper windfall to Plaintiff’s counsel contrary to Gisbrecht.

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II.

Conclusion

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For the foregoing reasons,

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IT IS ORDERED that Plaintiff’s Application for Award of Attorney’s Fees and

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Costs under 42 U.S.C. § 406(b) of the Social Security Act is GRANTED IN PART to the

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extent that Plaintiff’s counsel is AWARDED $2,250.00 in attorney’s fees pursuant to 42

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U.S.C. § 406(b).

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IT IS FURTHER ORDERED that Plaintiff’s Motion is DENIED to the extent that
he seeks an award of fees in excess of $2,250.00.
The Clerk of Court is DIRECTED to amend the judgment in this matter
accordingly.
Dated this 14th day of February, 2018.

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