James M Olivas v. Carolyn W Colvin

Filing 27

ORDER by Magistrate Judge Kenly Kiya Kato: granting 25 MOTION for Attorney Fees. Fees awarded in favor of James M Olivas against Carolyn W Colvin (dts)

1
2
3
4
5
6
7
8

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

9
10
11
12
13
14

Case No. EDCV 14-1159-KK

JAMES M. OLIVAS,
Plaintiff,
v.
CAROLYN W. COLVIN, Acting
Commissioner of Social Security,

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

Defendant.

15
16
17

I.

18

INTRODUCTION

19

Plaintiff James M. Olivas’s (“Plaintiff’s”) counsel, Vijay Jagdish Patel of

20

Law Offices of Lawrence D. Rohlfing (“Counsel”), filed a Motion for Attorney

21

Fees Pursuant to Title 42 of the United States Code, section 406(b) (“Motion”).

22

The Motion seeks an award in the amount of $17,499.00 for representing Plaintiff

23

in an action to obtain disability insurance benefits and supplemental security

24

income, with a refund to Plaintiff of $4,461.62 for the Equal Access to Justice Act

25

(“EAJA”) fees previously awarded.

26

The parties have consented to the jurisdiction of the undersigned United

27

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

28

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

1

II.

2

RELEVANT BACKGROUND

3

On June 13, 2014, Plaintiff filed the complaint in this action. See ECF

4

Docket No. (“Dkt.”) 3, Compl. at 1. Plaintiff alleged defendant Carolyn W. Colvin

5

(“Defendant”) had improperly denied Plaintiff’s applications for disability

6

insurance benefits and supplemental security income. Id. at 2-3. On February 9,

7

2015, the Court found Defendant erred in denying Plaintiff’s applications, and

8

entered Judgment reversing and remanding the case to Defendant for further

9

administrative proceedings. Dkt. 22, Judgment. On remand, Defendant stated she

10

would withhold $17,499.00 as twenty-five percent of Plaintiff’s past due benefits

11

“to pay [Plaintiff’s] representative.” Dkt. 25-3, Notice of Award at 4.

12
13
14

On April 10, 2015, the Court awarded Counsel EAJA fees in the amount of
$4,461.62. Dkt. 24, Order Granting EAJA Fees.
On April 20, 2016, pursuant to Title 42 of the United States Code, section

15

406(b), Counsel filed the instant Motion seeking the amount of $17,499.00 for

16

representing Plaintiff in the underlying proceedings before the Court. Dkt. 25,

17

Mot. Counsel states he would “reimburse James M. Olivas the amount of

18

$4,461.62 for the EAJA fees previously paid.” Id. at 3. Counsel also states 27.9

19

hours of attorney time were expended on Plaintiff’s case, Dkt. 25-4, Itemized

20

Hours, and seeks compensation pursuant to a contingency fee agreement stating

21

Counsel would receive “25% of the backpay awarded upon reversal of an

22

unfavorable ALJ decision,” Dkt. 25-1, Contingency Fee Agreement.

23

On April 20, 2016, Plaintiff was served with the Motion and informed he had

24

a right to file a response to the Motion. Dkt. 25, Mot. at 2, 10. However, Plaintiff

25

failed to file a timely response. On May 4, 2016, Defendant filed a Non-Opposition

26

to the Motion stating she “takes no position on the reasonableness of the

27

[Motion’s] request.” Dkt. 26, Non-Opposition at 4. Thus, the Court deems this

28

matter submitted.
2

1

III.

2

DISCUSSION

3
4
5

A.

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

provides, in part:

6

Whenever a court renders a judgment favorable to a claimant under

7

this subchapter who was represented before the court by an attorney,

8

the court may determine and allow as part of its judgment a reasonable

9

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

10

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

11

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

12

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

13

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

14

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

15

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

16

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

17

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

18

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

19

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

20

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

21

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

22

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

23

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

24

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

25

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

26

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

27

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

28

agreements.” Gisbrecht, 535 U.S. at 793. Thus, courts should not apply lodestar
3

1

rules in cases where the claimant and counsel reached a contingent fee agreement

2

because:

3

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

4

assume in representing [social security] claimants and ordinarily

5

produces remarkably smaller fees than would be produced by starting

6

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

7

lodestar to determine a reasonable fee thus ultimately works to the

8

disadvantage of [social security] claimants who need counsel to

9

recover any past-due benefits at all.

10

Crawford, 586 F.3d at 1149.

11

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

12

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

13

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

14

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

15

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

16

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

17

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

18

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

19

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

20

B.

21

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

22

retained Counsel to represent him in federal court in his appeal from the

23

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

24

twenty-five percent of any past due benefits obtained. See Dkt. 25-1, Contingency

25

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

26

warrants no reduction of the fee Counsel seeks.

27
28

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
4

1

obtained a favorable outcome for Plaintiff, ultimately resulting in a remand for

2

further administrative proceedings and an award of past due benefits. See Dkt. 22,

3

Judgment; Dkt. 25-3, Notice of Award. Further, the 27.9 hours expended to

4

litigate this case was reasonable and within the approved range for social security

5

disability cases. See Patterson v. Apfel, 99 F. Supp. 2d 1212, 1214 & n.2 (C.D. Cal.

6

2000) (noting that “a survey of several dozen cases in which attorney’s fees were

7

awarded in social security cases suggests that the 33.75 hours spent by plaintiff’s

8

counsel falls within the approved range”).
In addition, a fee of $17,499.00 based on 27.9 hours of attorney time is

9
10

reasonable. See Dkt. 25-4, Itemized Hours. The Court finds Counsel’s effective

11

hourly rate of approximately $627.40, id., reasonable under the circumstances. See

12

Villa v. Astrue, 2010 WL 118454, at *1-2 (E.D. Cal. Jan. 7, 2010) (approving

13

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

14

[Section] 406(b) fees after Crawford is a dicey business”). Further, post-Gisbrecht

15

decisions have approved contingent fee agreements yielding hourly rates greater

16

than the rate Counsel seeks. E.g., Daniel v. Astrue, 2009 WL 1941632, at *2-3

17

(C.D. Cal. July 2, 2009) (approving fees amounting to $1,491.25 per hour). Hence,

18

in light of the hours Counsel expended, the Section 406(b) fee award amount

19

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

20
21

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

22

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

23

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

24

Section 406(b) fees Counsel requests reasonable.

25

///

26

///

27

///

28

///
5

1

IV.

2

ORDER

3

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

4

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

5

GRANTED; and (2) Defendant is directed to pay Counsel the sum of $17,499.00

6

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

7

of $4,461.62.

8
9
10

Dated: May 06, 2016
HONORABLE KENLY KIYA KATO
United States Magistrate Judge

11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
6