Melissa Khan v. Michael J. Astrue

Filing 28

ORDER by Magistrate Judge Kenly Kiya Kato: granting 22 MOTION for Attorney Fees. Fees awarded in favor of Melissa Khan against Carolyn W Colvin. (dts)

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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

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Case No. EDCV 12-2106-KK

MELISSA KHAN,
Plaintiff,

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v.

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ORDER GRANTING MOTION FOR
ATTORNEY FEES PURSUANT TO
42 U.S.C. § 406(B)

CAROLYN W. COLVIN, Acting
Commissioner of Social Security,
Defendant.

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I.

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INTRODUCTION

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Plaintiff Melissa Khan’s (“Plaintiff’s”) counsel, William M. Kuntz

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(“Counsel”), filed a Motion for Attorney Fees Pursuant to Title 42 of the United

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States Code, section 406(b) (“Motion”). The Motion seeks an award in the

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amount of $6,516.70 for representing Plaintiff in an action to obtain Disability

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Insurance Benefits (“DIB”) and Supplemental Security Income (“SSI”) with a

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refund to Plaintiff of $2,900 for the Equal Access to Justice Act (“EAJA”) fees

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previously awarded.

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The parties have consented to the jurisdiction of the undersigned United

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States Magistrate Judge, pursuant to Title 28 of the United States Code, section

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636(c). For the reasons stated below, the Court grants the Motion.

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II.

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RELEVANT BACKGROUND
On December 13, 2012, Plaintiff filed the Complaint in this action alleging

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defendant Carolyn W. Colvin (“Defendant”) improperly denied Plaintiff’s

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applications for DIB and SSI. See ECF Docket No. (“Dkt.”) 3, Compl. On June

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24, 2014, the Court found Defendant erred in denying Plaintiff’s applications and

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entered Judgement reversing and remanding the case to Defendant for further

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administrative proceedings. Dkt. 18, Order; Dkt. 19, Judgment.
On September 26, 2014, the Court issued an order approving the Parties’

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stipulation for award of EAJA fees to Counsel in the amount of $2,900. Dkt. 20,

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Order Granting EAJA Fees.
On December 21, 2016, pursuant to Title 42 of the United States Code,

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section 406(b), Counsel filed the instant Motion seeking the amount of $6,516.70

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for representing Plaintiff in the underlying proceedings before the Court. Dkt. 22,

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Mot. Additionally, Counsel seeks an order to reimburse Plaintiff “the amount of

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the $2,900 for EAJA fees previously paid by the Commissioner.” Id. Accordingly,

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Counsel seeks a net fee of $3,616.70. Id. at 1. Counsel states 16.25 hours of

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attorney time were expended on Plaintiff’s case, Itemized Hours, Dkt. 22, Ex. 4,

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and seeks compensation pursuant to a contingency fee agreement stating “client

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will pay attorney a fee equal to 25% of all past due benefits” resulting from a

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favorable decision by the Appeals Council. Contingency Fee Agreement, Dkt. 22,

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Ex. 1.

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On December 21, 2016, Plaintiff was served with the Motion and informed

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she had a right to file a response to the Motion. Mot. at 1-2. On December 22,

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2016, Defendant filed a Non-Opposition to the Motion stating she “takes no

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position on the reasonableness of the [Motion’s] request.” Dkt. 23, Non-

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Opposition at 5. Plaintiff failed to file a timely response. Thus, the Court deems

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this matter submitted.
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III.

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DISCUSSION

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A.

APPLICABLE LAW
Title 42 of the United States Code, section 406(b) (“Section 406(b)”)

provides, in part:

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Whenever a court renders a judgment favorable to a claimant under

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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

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fee for such representation, not in excess of 25 percent of the total of

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the past-due benefits to which the claimant is entitled by reason of

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such judgment, and the Commissioner of Social Security may . . .

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certify the amount of such fee for payment to such attorney out of, and

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not in addition to, the amount of such past-due benefits.

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42 U.S.C. § 406(b)(1)(A). Thus, “a prevailing [disability] claimant’s [attorney’s]

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fees are payable only out of the benefits recovered; in amount, such fees may not

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exceed 25 percent of past-due benefits.” Gisbrecht v. Barnhart, 535 U.S. 789, 792,

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122 S. Ct. 1817, 152 L. Ed. 2d 996 (2002).

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Where a claimant entered into a contingent fee agreement with counsel, a

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court must apply Section 406(b) “to control, not to displace, fee agreements

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between Social Security benefits claimants and their counsel.” Id. at 793. A court

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should not use a “lodestar method,” under which a district court “determines a

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reasonable fee by multiplying the reasonable hourly rate by the number of hours

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reasonably expended on the case.” Crawford v. Astrue, 586 F.3d 1142, 1148 (9th

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Cir. 2009) (en banc) (citation omitted). Rather, where the claimant and counsel

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entered into a lawful contingent fee agreement, courts that use the “lodestar”

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method as the starting point to determine the reasonableness of fees requested

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under Section 406(b) improperly “reject the primacy of lawful attorney-client fee

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agreements.” Gisbrecht, 535 U.S. at 793. Thus, courts should not apply lodestar
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rules in cases where the claimant and counsel reached a contingent fee agreement

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because:

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[t]he lodestar method under-compensates attorneys for the risk they

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assume in representing [social security] claimants and ordinarily

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produces remarkably smaller fees than would be produced by starting

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with the contingent-fee agreement. A district court’s use of the

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lodestar to determine a reasonable fee thus ultimately works to the

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disadvantage of [social security] claimants who need counsel to

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recover any past-due benefits at all.

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Crawford, 586 F.3d at 1149.

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However, even in contingency fee cases, a court has “an affirmative duty to

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assure that the reasonableness of the fee [asserted by counsel] is established.” Id.

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The court must examine “whether the amount need be reduced, not whether the

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lodestar amount should be enhanced.” Id. The court may consider factors such as

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the character of the representation, the results achieved, the ratio between the

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amount of any benefits awarded and the time expended, and any undue delay

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attributable to counsel that caused an accumulation of back benefits in determining

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whether a lawful contingent fee agreement is reasonable. See Gisbrecht, 535 U.S.

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at 808; Crawford, 586 F.3d at 1151.

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B.

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ANALYSIS
Here, Counsel seeks a reasonable fee under Section 406(b). Plaintiff

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retained Counsel to represent her in federal court in her appeal from the

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administrative denial of benefits, and agreed to pay Counsel a contingency fee of

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twenty-five percent of any past due benefits obtained. See Contingency Fee

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Agreement. Consideration of the factors set forth in Gisbrecht and Crawford

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warrants no reduction of the fee Counsel seeks.

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The record discloses no issue regarding the quality or efficiency of Counsel’s
representation before this Court, or any misconduct or delay by Counsel. Counsel
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obtained a favorable outcome for Plaintiff, ultimately resulting in an award of past

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due benefits. See Judgment; Notice of Award, Dkt. 22, Exs. 3A and 3B. Further,

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the 16.25 hours expended to litigate this case was reasonable and within the

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approved range for social security disability cases. See Patterson v. Apfel, 99 F.

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Supp. 2d 1212, 1214 & n.2 (C.D. Cal. 2000) (noting that “a survey of several dozen

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cases in which attorney’s fees were awarded in social security cases suggests that

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the 33.75 hours spent by plaintiff’s counsel falls within the approved range”).

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In addition, a fee of $6,516.70 based on 16.25 hours of attorney time is

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reasonable. See Itemized Hours. The Court finds Counsel’s effective hourly rate

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of approximately $401.03 reasonable under the circumstances. See Villa v. Astrue,

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2010 WL 118454, at *1-2 (E.D. Cal. Jan. 7, 2010) (approving Section 406(b) fees

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exceeding $1,000.00 per hour, and noting “[r]educing [Section] 406(b) fees after

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Crawford is a dicey business”). Further, post-Gisbrecht decisions have approved

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contingent fee agreements yielding hourly rates greater than the rate Counsel

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seeks. E.g., Daniel v. Astrue, 2009 WL 1941632, at *2-3 (C.D. Cal. July 2, 2009)

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(approving fees amounting to $1,491.25 per hour). Hence, in light of the hours

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Counsel expended, the Section 406(b) fee award amount Counsel requests does

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not represent an unfair windfall to Counsel.
Finally, nothing in the record suggests any overreaching in the making of the

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fee agreement or any impropriety on the part of Counsel in representing Plaintiff.

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Counsel assumed the risk of nonpayment inherent in a contingency agreement and

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Counsel’s efforts proved successful for Plaintiff. Accordingly, the Court finds the

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Section 406(b) fees Counsel requests reasonable.

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IV.

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ORDER

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Based on the foregoing, IT IS HEREBY ORDERED: (1) Counsel’s Motion

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for Attorney Fees Pursuant to Title 42 of the United States Code, section 406(b) is

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GRANTED; and (2) Defendant is directed to pay Counsel the sum of $6,516.70

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with a reimbursement to Plaintiff for EAJA fees previously awarded in the amount

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of $2,900.

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Dated: January 17, 2017
HONORABLE KENLY KIYA KATO
United States Magistrate Judge

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