Derica L. Stoecker v. Carolyn W. Colvin

Filing 31

ORDER by Magistrate Judge Kenly Kiya Kato: granting 25 MOTION for Attorney Fees. Fees awarded in favor of Derica L. Stoecker against Carolyn W. Colvin in the amount of $12,221.00. (dts)

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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA 9 10 DERICA L. STOECKER, Plaintiff, 11 12 13 14 15 Case No. CV 13-8892-KK v. ORDER GRANTING MOTION FOR ATTORNEY FEES PURSUANT TO 42 U.S.C. § 406(B) NANCY A. BERRYHILL1, Acting Commissioner of Social Security, Defendant. 16 17 I. 18 INTRODUCTION 19 Plaintiff Derica L. Stoecker’s (“Plaintiff’s”) counsel, Rebecca C. Padilla of 20 Potter, Cohen & Samulon (“Counsel”), filed a Motion for Attorney’s Fees 21 Pursuant to 42 U.S.C. § 406(b) (“Motion”). The Motion seeks an award in the 22 amount of $12,221.00 for representing Plaintiff in an action to retain her 23 Supplemental Security Income (“SSI”), with a refund to Plaintiff of $4,000.00 for 24 the Equal Access to Justice Act (“EAJA”) fees previously awarded. 25 26 27 28 1 Nancy A. Berryhill is now the Acting Commissioner of the Social Security Administration. Pursuant to Rule 25(d) of the Federal Rules of Civil Procedure, the Court substitutes Nancy A. Berryhill as Defendant in the instant case. 1 The parties have consented to the jurisdiction of the undersigned United 2 States Magistrate Judge, pursuant to 28 U.S.C. § 636(c). For the reasons stated 3 below, the Court grants the Motion. 4 II. 5 RELEVANT BACKGROUND 6 On December 11, 2013, Plaintiff filed the complaint in this action. See ECF 7 Docket No. (“Dkt.”) 3, Compl. Plaintiff alleged defendant Carolyn W. Colvin 8 (“Defendant”) improperly denied Plaintiff SSI benefits. Id. at 2. On October 2, 9 2014, the Court found Defendant erred in denying Plaintiff benefits, and entered 10 Judgment reversing and remanding the case to Defendant for further 11 administrative proceedings. Dkt. 22, Judgment. 12 13 14 On December 2, 2014, the Court awarded Counsel EAJA fees in the amount of $4,000.00. Dkt. 24, Order Granting EAJA Fees. On June 5, 2017, pursuant to 42 U.S.C. § 406(b), Counsel filed the instant 15 Motion seeking the amount of $12,221.00 for representing Plaintiff in the 16 underlying proceedings before the Court. Dkt. 25. Counsel states, “Upon receipt 17 of payment pursuant to this motion, Plaintiff’s counsel will refund to Plaintiff 18 whichever is less, the award made pursuant to this motion or the award made 19 pursuant to the Equal Access to Justice Act.” Id. at 2. According to Counsel, 20 24.75 hours of attorney time were expended on Plaintiff’s case. Itemized Hours, 21 Dkt. 25, Ex. 5. Counsel, therefore, seeks compensation pursuant to a contingency 22 fee agreement stating Counsel’s attorney’s fees “shall be the lesser of: (1) 25% of all 23 past due benefits arising out of the claim, including dependents’ benefits, or (2) the 24 maximum allowed by section 206(a)(2)(A) of the Social Security Act (which is 25 currently $6,000 but can be increased by Federal Government).” Contingency Fee 26 Agreement, Dkt. 25, Ex. 1. 27 On June 5, 2017, Plaintiff was served with the Motion and informed she had 28 a right to file a response to the Motion. Dkt. 25, Mot. at 2; Dkt. 27. Plaintiff failed 2 1 to file a timely response. On June 22, 2017, Defendant filed a Non-Opposition to 2 the Motion stating she “takes no position on the reasonableness of the [Motion’s] 3 request.” Dkt. 30, Non-Opposition at 4. Thus, the Court deems this matter 4 submitted. 5 III. 6 DISCUSSION 7 A. APPLICABLE LAW 8 42 U.S.C. § 406(b) (“Section 406(b)”) provides, in part: 9 Whenever a court renders a judgment favorable to a claimant under 10 this subchapter who was represented before the court by an attorney, 11 the court may determine and allow as part of its judgment a reasonable 12 fee for such representation, not in excess of 25 percent of the total of 13 the past-due benefits to which the claimant is entitled by reason of 14 such judgment, and the Commissioner of Social Security may . . . 15 certify the amount of such fee for payment to such attorney out of, and 16 not in addition to, the amount of such past-due benefits. 17 42 U.S.C. § 406(b)(1)(A). Thus, “a prevailing [disability] claimant’s [attorney’s] 18 fees are payable only out of the benefits recovered; in amount, such fees may not 19 exceed 25 percent of past-due benefits.” Gisbrecht v. Barnhart, 535 U.S. 789, 792, 20 122 S. Ct. 1817, 152 L. Ed. 2d 996 (2002). 21 Where a claimant entered into a contingent fee agreement with counsel, a 22 court must apply Section 406(b) “to control, not to displace, fee agreements 23 between Social Security benefits claimants and their counsel.” Id. at 793. A court 24 should not use a “lodestar method,” under which a district court “determines a 25 reasonable fee by multiplying the reasonable hourly rate by the number of hours 26 reasonably expended on the case.” Crawford v. Astrue, 586 F.3d 1142, 1148 (9th 27 Cir. 2009) (en banc) (citation omitted). Rather, where the claimant and counsel 28 entered into a lawful contingent fee agreement, courts that use the “lodestar” 3 1 method as the starting point to determine the reasonableness of fees requested 2 under Section 406(b) improperly “reject the primacy of lawful attorney-client fee 3 agreements.” Gisbrecht, 535 U.S. at 793. Thus, courts should not apply lodestar 4 rules in cases where the claimant and counsel reached a contingent fee agreement 5 because: 6 [t]he lodestar method under-compensates attorneys for the risk they 7 assume in representing [social security] claimants and ordinarily 8 produces remarkably smaller fees than would be produced by starting 9 with the contingent-fee agreement. A district court’s use of the 10 lodestar to determine a reasonable fee thus ultimately works to the 11 disadvantage of [social security] claimants who need counsel to 12 recover any past-due benefits at all. 13 Crawford, 586 F.3d at 1149. 14 However, even in contingency fee cases, a court has “an affirmative duty to 15 assure that the reasonableness of the fee [asserted by counsel] is established.” Id. 16 The court must examine “whether the amount need be reduced, not whether the 17 lodestar amount should be enhanced.” Id. The court may consider factors such as 18 the character of the representation, the results achieved, the ratio between the 19 amount of any benefits awarded and the time expended, and any undue delay 20 attributable to counsel that caused an accumulation of back benefits in determining 21 whether a lawful contingent fee agreement is reasonable. See Gisbrecht, 535 U.S. 22 at 808; Crawford, 586 F.3d at 1151. 23 B. 24 ANALYSIS Here, Counsel seeks a reasonable fee under Section 406(b). Plaintiff 25 retained Counsel to represent her in federal court in her appeal from the 26 administrative denial of benefits, and agreed to pay Counsel a contingency fee of 27 twenty-five percent of any past due benefits obtained. See Contingency Fee 28 4 1 Agreement, Dkt. 25, Ex. 1. Consideration of the factors set forth in Gisbrecht and 2 Crawford warrants no reduction of the fee Counsel seeks. 3 The record discloses no issue regarding the quality or efficiency of Counsel’s 4 representation before this Court, or any misconduct or delay by Counsel. Counsel 5 obtained a favorable outcome for Plaintiff, ultimately resulting in a remand for 6 further administrative proceedings and an award of past due benefits. See Dkt. 22, 7 Judgment; Notice of Award, Dkt. 25, Ex. 4. Further, the 24.75 hours expended to 8 litigate this case was reasonable and within the approved range for social security 9 disability cases. See Patterson v. Apfel, 99 F. Supp. 2d 1212, 1214 & n.2 (C.D. Cal. 10 2000) (noting that “a survey of several dozen cases in which attorney’s fees were 11 awarded in social security cases suggests that the 33.75 hours spent by plaintiff’s 12 counsel falls within the approved range”). 13 In addition, a fee of $12,221.00 based on 24.75 hours of attorney time is 14 reasonable. See Itemized Hours, Dkt. 25, Ex. 5. The Court finds Counsel’s 15 effective hourly rate of approximately $493.77 reasonable under the circumstances. 16 Dkt. 25, Mem. of Points and Authorities, at 7; see Villa v. Astrue, 2010 WL 118454, 17 at *1-2 (E.D. Cal. Jan. 7, 2010) (approving Section 406(b) fees exceeding $1,000.00 18 per hour, and noting “[r]educing [Section] 406(b) fees after Crawford is a dicey 19 business”). Further, post-Gisbrecht decisions have approved contingent fee 20 agreements yielding hourly rates greater than the rate Counsel seeks. See, e.g., 21 Daniel v. Astrue, 2009 WL 1941632, at *2-3 (C.D. Cal. July 2, 2009) (approving 22 fees amounting to $1,491.25 per hour). Hence, in light of the hours Counsel 23 expended, the Section 406(b) fee award amount Counsel requests does not 24 represent an unfair windfall to Counsel. 25 Finally, nothing in the record suggests any overreaching in the making of the 26 fee agreement or any impropriety on the part of Counsel in representing Plaintiff. 27 Counsel assumed the risk of nonpayment inherent in a contingency agreement and 28 5 1 Counsel’s efforts proved successful for Plaintiff. Accordingly, the Court finds the 2 Section 406(b) fees Counsel requests reasonable. 3 IV. 4 ORDER 5 Based on the foregoing, IT IS HEREBY ORDERED: (1) Counsel’s Motion 6 for Attorney Fees Pursuant to 42 U.S.C. § 406(b) is GRANTED; and (2) 7 Defendant is directed to pay Counsel the sum of $12,221.00 with a reimbursement 8 to Plaintiff for EAJA fees previously awarded in the amount of 9 $4,000. 10 11 12 13 Dated: June 26, 2017 HONORABLE KENLY KIYA KATO United States Magistrate Judge 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 6

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