Craig M. Fratt v. Carolyn W. Colvin
Filing
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ORDER by Magistrate Judge Kenly Kiya Kato: granting 32 MOTION for Attorney Fees. Fees awarded in favor of Craig M. Fratt against Carolyn W. Colvin. (dts)
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
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Plaintiff,
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Case No. EDCV 14-779-KK
CRAIG M. FRATT,
v.
MEMORANDUM AND ORDER
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CAROLYN W. COLVIN, Acting
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Commissioner of Social Security,
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Defendant.
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I.
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INTRODUCTION
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Plaintiff Craig M. Fratt’s (“Plaintiff’s”) counsel, Shanny J. Lee of Law
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Offices of Charles E. Binder and Harry J. Binder (“Counsel”), filed a Motion for
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Attorney’s Fees Pursuant to Title 42 of the United States Code, section 406(b)
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(“Motion”). The Motion seeks an award in the amount of $24,163.23 for
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representing Plaintiff in an action to obtain disability insurance benefits and
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supplemental security income, with a refund to Plaintiff of $3,400.00 for the Equal
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Access to Justice Act (“EAJA”) fees 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
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On April 21, 2014, Plaintiff filed the complaint in this action. See ECF
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Docket No. (“Dkt.”) 1, Compl. at 1. Plaintiff alleged defendant Carolyn W. Colvin
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(“Defendant”) had improperly denied Plaintiff’s applications for disability
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insurance benefits and supplemental security income. Id. at 2-3. On October 7,
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2014, the Court found Defendant erred in denying Plaintiff’s applications, and
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entered Judgment reversing and remanding the case to Defendant for further
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administrative proceedings. Dkt. 16, Judgment. On remand, Defendant stated she
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would withhold $24,163.23 as twenty-five percent of Plaintiff’s past due benefits
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“in case [she] need[ed] to pay [Plaintiff’s] lawyer.” Dkt. 33-2, Notice of Award.
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On December 1, 2014, the Court awarded Counsel EAJA fees in the amount
of $3,400.00. Dkt. 18, Order Awarding EAJA Fees.
On March 23, 2016, pursuant to Title 42 of the United States Code, section
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406(b), Counsel filed the instant Motion seeking the amount of $24,163.23 for
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representing Plaintiff in the underlying proceedings before the Court. Dkt. 32,
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Mot. Counsel states it would credit “$3,400.00, the amount already awarded in
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attorney’s fees under the Equal Access to Justice Act” to Plaintiff. Id. at 2.
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Counsel also states 18.8 hours of attorney time were expended on Plaintiff’s case,
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Dkt. 33-4, Contemporaneous Hours, and seeks compensation pursuant to a
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contingency fee agreement stating Counsel “may apply for fees to U.S. District
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Court under § 406(b). These fees will not exceed 25% of the back due benefits,”
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Dkt. 33-3, Retainer Agreement and Assignment.
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On March 23, 2016, Plaintiff was served with the Motion and informed he
had a right to file a response to the Motion. Dkt. 35, Proof of Service. On April 1,
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2016, Plaintiff filed a statement asking the Court to deny Counsel’s request as
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“extremely excessive due to the poor level of service that was received” and
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asserting Counsel has “continuously lost or misplaced important paperwork, not
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returned phone calls rude, substandard performance and delay.” Dkt. 36,
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Statement at 1. On April 6, 2016, Defendant filed a response to the Motion stating
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she “takes no position on the reasonableness of the [Motion’s] request.” Dkt. 37,
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Defendant’s Response at 5. No Reply was filed. Thus, the Court deems this
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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.
ANALYSIS
Here, Counsel seeks a reasonable fee under Section 406(b). Plaintiff
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retained Counsel to represent him in federal court in his appeal from the
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administrative denial of benefits, and agreed to pay Counsel a contingent fee of
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twenty-five percent of any past due benefits obtained. See Dkt. 33-3.
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Consideration of the factors set forth in Gisbrecht and Crawford warrants no
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reduction of the fee Counsel seeks.
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Plaintiff’s allegations regarding Counsel’s conduct, Dkt. 36 at 1, fail to
warrant a reduction in the fees Counsel requests. See Gisbrecht, 535 U.S. at 808
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(citing Lewis v. Sec’y of Health & Human Servs., 707 F.2d 246, 248 (6th Cir. 1983)
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(reduced fee for substandard performance where counsel poorly prepared for a
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hearing and over-billed services)). The record discloses no issue regarding the
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quality or efficiency of Counsel’s representation before this Court, or any
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misconduct or delay by Counsel. Counsel obtained a favorable outcome for
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Plaintiff, ultimately resulting in a remand for further administrative proceedings
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and an award of past due benefits. See Dkt. 16. Further, the time expended to
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litigate this case was reasonable and within the approved range for social security
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disability cases. See Patterson v. Apfel, 99 F. Supp. 2d 1212, 1214 & n.2 (C.D. Cal.
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2000) (noting that “a survey of several dozen cases in which attorney’s fees were
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awarded in social security cases suggests that the 33.75 hours spent by plaintiff’s
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counsel falls within the approved range”).
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In addition, a fee of $24,163.23 based on 18.8 hours of attorney time
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is reasonable. See Dkt. 33-4. The Court finds Counsel’s effective hourly rate of
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approximately $1,285.28, id., reasonable under the circumstances. See Villa v.
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Astrue, 2010 WL 118454, at *1-2 (E.D. Cal. Jan. 7, 2010) (approving Section
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406(b) fees exceeding $1,000 per hour, and noting that “[r]educing [Section]
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406(b) fees after Crawford is a dicey business”). Further, post-Gisbrecht decisions
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have approved contingent fee agreements yielding hourly rates greater than the rate
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Counsel seeks. E.g., Daniel v. Astrue, 2009 WL 1941632, at *2-3 (C.D. Cal. July 2,
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2009) (approving fees amounting to $1,491.25 per hour). Hence, in light of the
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hours Counsel expended, the Section 406(b) fee award amount Counsel requests
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would not represent an unfair windfall to Counsel.
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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
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Motion for Attorney’s Fees is GRANTED; and (2) Defendant is directed to pay
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Counsel the sum of $24,163.23 with a reimbursement to Plaintiff for EAJA fees
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previously awarded in the amount of $3,400.00.
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Dated: April 18, 2016
HONORABLE KENLY KIYA KATO
United States Magistrate Judge
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