Steven Edwards v. Carolyn W Colvin

Filing 30

ORDER Re: Counsel's "Motion for Attorney Fees Pursuant to 42 U.S.C. 406(b), etc. by Magistrate Judge Charles F. Eick re Stipulation for Award of EAJA Fees 23 . Section 406(b) fees are allowed in the amount of $16,560.23 to be paid ou t of the sums withheld by the Commissioner from Plaintiff's benefits. Counsel shall reimburse Plaintiff in the amount of $2,400 previously paid by the Government under the EAJA. Counsel need not reimburse Plaintiff for the $6,000 in fees counsel previously received from the Administration under Section 406(a). (sp)

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UNITED STATES DISTRICT COURT

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CENTRAL DISTRICT OF CALIFORNIA

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STEVEN EDWARDS,

)
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Plaintiff,
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v.
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NANCY A. BERRYHILL, ACTING
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COMMISSIONER OF SOCIAL SECURITY
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ADMINISTRATION,1/
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Defendant.
)
___________________________________)

NO. ED CV 14-1798-E

ORDER RE: COUNSEL’S “MOTION
FOR ATTORNEY FEES PURSUANT TO
42 U.S.C. § 406(b), etc.”

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PROCEEDINGS

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On July 27, 2017, counsel for Plaintiff filed “Counsel’s Notice

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of Motion and Motion for Attorney Fees Pursuant to 42 U.S.C. § 406(b),

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etc.” (“the Motion”) with exhibits (“Motion Ex.”).

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$22,560.23 in fees from the Administration, with an order to reimburse

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Plaintiff for: (1) the $6,000 the Administration previously awarded

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under 28 U.S.C. § 406(a) for counsel’s time spent before the

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Administration; and (2) the $2,400 the Government previously paid in

The Motion seeks

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1/

Pursuant to Rule 25(d) of the Federal Rules of Civil Procedure,
Nancy A. Berryhill is hereby substituted as the defendant in this
action.

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fees under 28 U.S.C. § 2412(d) (the Equal Access to Justice Act

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(“EAJA”)).

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net fee to counsel of $14,160.23 for 20.9 hours of work counsel and

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his paralegals performed before this Court under a contingent fee

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agreement with Plaintiff.

Counsel submits that the order requested would result in a

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On August 11, 2017, Defendant filed a response that purportedly

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takes no position regarding whether the requested fee is “reasonable.”

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Defendant’s response suggests, however, that a calculation of the de

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facto hourly rate counsel seeks ranges from $1,514.11 for attorney and

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paralegal time, to $2,108.43 for only attorney time.

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Response, p. 4 n.3.

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without oral argument.

See Defendant’s

The Court has taken the Motion under submission
See Minute Order, filed July 28, 2017.

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BACKGROUND

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Plaintiff filed a complaint on September 8, 2014, seeking review

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of the Commissioner’s denial of disability benefits.

The parties

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filed a consent to proceed before a United States Magistrate Judge on

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September 29, 2014.

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March 11, 2015.

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June 4, 2015.

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and remanded this matter to the Commissioner for further

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administrative action, finding that the Administrative Law Judge’s

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reasoning did not suffice to support an adverse credibility finding.

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See Memorandum Opinion and Order of Remand and Judgment (Docket Nos.

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21-22).

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Court awarded EAJA fees in the amount of $2,400, payable to

Plaintiff filed a motion for summary judgment on

Defendant filed a motion for summary judgment on
On July 14, 2015, the Court denied the parties’ motions

On September 29, 2015, upon the parties’ stipulation, the

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Plaintiff’s counsel (Docket Nos. 23-26).

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On remand, the Administration conducted additional proceedings

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that resulted in an award of past-due Supplemental Security Income

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(“SSI”) of $2,975.92 and past-due Disability Insurance Benefits

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(“DIB”) of $87,265.00, for a total of $90,240.92 in past-due benefits.

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See Motion Ex. 9, p. 2, and Ex. 10, p. 3.2/

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Administration withheld for the payment of attorney fees $22,560.23

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(i.e., $743.98 from past-due SSI, plus $21,816.25 from past-due DIB).

From these awards, the

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See Motion, p. 1; Motion Ex. 9, p. 2, and Ex. 10, p. 4.

Counsel now

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seeks the entirety of this amount under Section 406(b).

See id.

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indicated above, counsel already has received $6,000 under Section

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406(a) for work performed before the Administration.

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any supporting authority, counsel urges the Court to order a

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reimbursement to Plaintiff of the Section 406(a) fees.

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1; Motion Ex. 10, p. 3.

As

Without citing

See Motion, p.

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In support of the Motion, counsel has submitted copies of the fee

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agreements between counsel and Plaintiff dated August 17, 2011, and

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August 20, 2014.

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for a contingent fee of the lesser of 25 percent of past-due benefits

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or $6,000 under Section 406(a), and an additional fee of 25 percent of

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///

See Motion, Exs. 1B and 4.

These agreements provide

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2/

Plaintiff claims that past-due SSI totaled $2,231.94. See Motion,
p. 4. However, that amount represented SSI only through January of
2016. See Motion Ex. 9, p. 2. The Administration withheld from pastdue SSI $743.98 for the payment of attorney fees, which is 25 percent
of $2,975.92. See id.
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See id..3/

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any award of past-due benefits under Section 406(b).

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Counsel also submitted a billing itemization reflecting that counsel

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worked 10.7 hours and counsel’s paralegals worked either 9.33 hours or

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10.2 hours representing Plaintiff before the Court.

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14.4/

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were spent preparing Plaintiff’s motion for summary judgment, and six

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of the 9.33 paralegal hours were spent preparing the Motion.

See Motion Ex.

This billing itemization shows that all of counsel’s 10.7 hours

Id.

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APPLICABLE LAW

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Section 406(b)(1) of Title 42 provides:

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Whenever a court renders a judgment favorable to a claimant

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. . . 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

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reasonable fee for such representation, not in excess of

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25 percent of the total of the past-due benefits to which

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the claimant is entitled . . . In case of any such judgment,

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There is no legal prohibition against recovering more than 25
percent of past-due benefits for combined work before the
Administration and the Court. See Clark v. Astrue, 529 F.3d 1211,
1215-16 (9th Cir. 2008) (holding that 25 percent cap on fees under
Section 406(b) is not a cap for total fees under Sections 406(a) and
(b)); accord Laboy v. Colvin, 631 Fed. App’x 468, 468-69 (9th Cir.
2016).
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The itemized billing for counsel’s paralegals reflects a total of
560 minutes (9.33 hours), whereas the “Total Paralegal Hours” are
reported as 1.95 + 2.25 + 6 hours (a total of 10.2 hours). See Motion
Ex. 14; see also Motion, p. 6 (representing that total paralegal hours
are 10.2 hours). The Court has accepted only the itemized billing from
the statement and consequently has limited the recoverable paralegal
time to 9.33 hours.
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no other fee may be payable . . . for such representation

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except as provided in this paragraph.

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406(b)(1)(A).

42 U.S.C. §

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According to the United States Supreme Court, section 406(b)

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does not displace contingent-fee agreements as the primary

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means by which fees are set for successfully representing

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Social Security benefits claimants in court.

Rather,

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§ 406(b) calls for court review of such arrangements as an

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independent check, to assure that they yield reasonable

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results in particular cases.

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boundary line:

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that they provide for fees exceeding 25 percent of the past-

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due benefits.

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attorney for the successful claimant must show that the fee

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sought is reasonable for the services rendered.

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v. Barnhart, 535 U.S. 789, 807 (2002) (citations omitted)

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(emphasis added) (“Gisbrecht”).

Congress has provided one

Agreements are unenforceable to the extent

Within this 25 percent boundary . . . the

Gisbrecht

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The hours spent by counsel representing the claimant and

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counsel’s “normal hourly billing charge for noncontingent-fee cases”

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may aid “the court’s assessment of the reasonableness of the fee

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yielded by the fee agreement.”

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may reduce counsel’s recovery

Id. at 808.

The Court appropriately

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based on the character of the representation and the results

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the representative achieved.

If the attorney is responsible
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for delay, for example, a reduction is in order so that the

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attorney will not profit from the accumulation of benefits

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during the pendency of the case in court.

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are large in comparison to the amount of time counsel spent

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on the case, a downward adjustment is similarly in order.

If the benefits

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Id. (citations omitted) (emphasis added).

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precisely how a district court should quantify the “downward

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adjustment” when the court concludes such an adjustment is “in

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Gisbrecht does not instruct

order.”

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DISCUSSION

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For the reasons discussed below, the Court has concluded that a

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downward adjustment is “in order” in the present case.

Despite the

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primacy of the fee agreement, which provides for a separate contingent

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fee of 25 percent for Section 406(b) fees, Plaintiff’s counsel has

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failed to prove that the total Section 406(b) fee sought is

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“reasonable.”

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406(b)(1)(A).

See Gisbrecht, 535 U.S. at 807; 42 U.S.C. §

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Examining the reasonableness factors identified in Gisbrecht, the

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Court concludes that neither “the character of the representation” nor

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“the results the representative achieved” suggest the unreasonableness

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of the fee sought.

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Court resulted in a remand.

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complaint, consented to proceed before a Magistrate Judge, and

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prepared a motion for summary judgment.

Counsel’s representation of Plaintiff before the
Counsel filed and served a pro forma

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Nothing suggests that

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counsel’s representation was substandard or that the results achieved

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did not well serve Plaintiff’s interests.

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It does not appear that Plaintiff’s counsel was directly

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responsible for any significant delays in the initial administrative

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proceedings or in the proceedings before this Court.5/

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occur an unexplained delay in the administrative proceedings following

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this Court’s remand, however.

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Administration on July 14, 2015 (Docket Nos. 21-22).

There did

The Court remanded the matter to the
Yet, the Appeals

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Council did not remand the matter to the Administrative Law Judge

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until October 14, 2016.

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remand did not occur until after Plaintiff’s counsel followed up on

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August 2, 2016 (over a year after the Court’s remand).

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fully favorable administrative decision issued on February 1, 2017

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(Motion Ex. 8).

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past-due benefits accrued with no apparent work from counsel or the

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Administration.

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favorable decision on February 1, 2017, is negligible (i.e.,

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approximately $629.92).

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for that period, however, is much more substantial ($1,434.20 per

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month from February 2016 until November 2016, and $1,438.50 per month

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from December 2016 for a total of $17,219).

See Motion Exs. 6-7.

The Appeals Council’s

See id.

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Accordingly, it appears that approximately a year of

The accumulated SSI from February 1, 2016, until the

See Motion Ex. 9, p. 2.

The accumulated DIB

See Motion Ex. 10, p. 1.

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Plaintiff’s counsel began representing Plaintiff on or around
August 7, 2011. See Motion Ex. 1A. On August 31, 2011, counsel
applied for benefits for Plaintiff. See Motion Ex. 8, p. 1. Following
a hearing, an Administrative Law Judge issued an unfavorable decision
on April 11, 2013 (id.). The Appeals Council denied Plaintiff’s
request for review on August 6, 2014 (Motion Ex. 3). Counsel lodged a
complaint with this Court on August 29, 2014 (Docket No. 1), and
thereafter met all the deadlines imposed by the Court.
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Twenty-five percent of this amount is $4,304.75.

If counsel were

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proposing to receive the entire 25 percent of past-due benefits under

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Section 406(b) while retaining the $6,000 in Section 406(a) fees

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already awarded, the Court might well conclude that a downward

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adjustment should occur because of delay.

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to refund the Section 406(a) fees to Plaintiff, however, the Court

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finds no cause on grounds of delay to reduce the Section 406(b) fees

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requested.

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Cal. 2011) (discerning a windfall where a substantial amount of past-

Since counsel has offered

Compare Ashing v. Astrue, 798 F. Supp. 2d 1143, 1146 (C.D.

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due benefits resulted from delay at the administrative level and

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awarding reduced fees).

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If the Court’s analysis of counsel’s fee request were to end

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here, the fee requested could be deemed “reasonable.”

However,

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Gisbrecht further instructs that where “the benefits are large in

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comparison to the amount of time counsel spent on the case,” the fee

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resulting from a 25 percent contingency fee agreement can be

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unreasonable such that a downward adjustment could be “in order.”

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Gisbrecht, 535 U.S. at 808.

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$90,240.92 in past-due benefits, counsel spent only 10.7 hours before

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the Court and counsel’s paralegals spent only 9.33 hours before the

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Court.

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percent withholding of $22,560.23, (with a reimbursement to Plaintiff

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of the $6,000 previously awarded under Section 406(a)), for a net

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Here, Plaintiff reportedly recovered

Counsel has requested a Section 406(b) award of the total 25

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Section 406(b) award of $16,560.23.6/

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If the Court considers the entire Section 406(b) request of

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$22,560.23, the de facto hourly rate for combined counsel and itemized

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paralegal time (10.7 hours + 9.33 hours for a total of 20.03 hours),

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would be approximately $1,126.32 per hour (i.e., $22,560.23 / 20.03

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hours).7/

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hourly rates (i.e., $165 per hour for 8.25 hours + $140 per hour for

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the remaining 1.08 hours)8/ of $1,512.45, the remaining fee of

Deducting the cost of paralegal time at the reported EAJA

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$21,047.78 (i.e., $22,560.23 - $1,512.45) counsel is seeking for 10.7

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of counsel’s time yields a de facto hourly rate of $1,967.08 (i.e.,

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$21,047.78 / 10.7 hours).

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If the Court considers a net Section 406(b) award of $16,560.23,

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the de facto hourly rate for combined counsel and itemized paralegal

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time would be approximately $826.77 (i.e., $16,560.23 / 20.03 hours).

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Any award made under Section 406(b) must be offset by the $2,400
in fees counsel previously recovered under the EAJA, but such offset
does not effectively reduce the amount of fees counsel will have
recovered for time spent before the Court.
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Plaintiff’s counsel’s calculation of a de facto hourly rate of
$1,079.44 is based on the total withholding for both Section 406(a) and
Section 406(b) fee awards, divided by 20.9 hours (the total hours
reported for counsel and the unitemized alleged total time for his
paralegals). See Motion, p. 7 & Ex. 14.
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As explained in Footnote 4, the Court has accepted the itemized
billing for paralegal time of 560 total minutes as an accurate
reporting of the time the paralegals spent. The Court has given
counsel the benefit of the doubt and assumed that 495 minutes (i.e.,
135 minutes referenced in the “Total Paralegal Hours” plus 360
additional itemized minutes) (or 8.25 hours), are billable at the
higher paralegal rate, leaving the remaining 65 minutes (or 1.08 hours)
billable at the lower rate. See Motion Ex. 14.
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Deducting the cost of paralegal time at the reported EAJA hourly rates

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of $1,512.45, the remaining fee of $15,047.78 (i.e., $16,520.23 -

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$1,512.45) counsel is seeking for the 10.7 hours of counsel’s time

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yields a de facto hourly rate of approximately $1,406.33 (i.e.,

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$15,047.78 / 10.7 hours).

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An attorney seeking section 406(b) fees has the burden of proving

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that the fee sought is reasonable based on the facts of the particular

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case.

See Gisbrecht, 535 U.S. at 807-08.

The reasonableness of the

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fee sought in this case turns primarily on how the Court views the de

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facto hourly rates.

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regarding how the Court should view the de facto hourly rates beyond

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citing Crawford v. Astrue, 586 F.3d 1142 (9th Cir. 2009) (“Crawford”).

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In Crawford, the Ninth Circuit approved effective hourly rates for

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combined paralegal and attorney time as high as $902.

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however.

Counsel has offered little or no suggestion

See Motion at

The present case is materially distinguishable from Crawford,

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In each of the three cases consolidated in Crawford, unlike here,

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counsel requested section 406(b) fees far less than the agreed-upon 25

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percent of past-due benefits (i.e., from 13.94 to 16.95 percent of

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past-due benefits).

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of the section 406(a) fees awarded and the section 406(b) fees

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requested did not equal 25 percent of past-due benefits.

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46; see also Washington v. Barnhart, CV 03-6884-AN, “Counsel’s Motion

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for Attorney Fees Pursuant to 42 U.S.C. § 406(b), etc.”, p. 3 (Docket

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No. 16) (counsel recovered $7,000 in section 406(a) fees, and the

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entire fee sought would not equal 25 percent of past-due benefits);

In each of the three cases, unlike here, addition

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Id. at 1145-

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Trejo v. Barnhart, CV 98-5662-RNB, “Order Granting in Part Counsel’s

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Motion for Attorney Fees Pursuant to 42 U.S.C. § 406(b)” (Docket No.

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22) (counsel recovered $13,000 in section 406(a) fees, and the entire

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fee sought would not equal 25 percent of past-due benefits); Crawford

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v. Barnhart, CV 00-11884-AN, “Counsel’s Motion for Attorney Fees

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Pursuant to 42 U.S.C. § 406(b), etc.”, pp. 3-4 n.1 (Docket No. 22)

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(counsel recovered $4,000 in section 406(a) fees, and the entire fee

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sought would not equal 25 percent of past-due benefits).9/

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the three cases, the district court further reduced the section 406(b)

In each of

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fees to avoid a perceived windfall, and based the reduction on an

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enhanced lodestar calculation.

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46.

See Crawford, 586 F.3d at 1144, 1145-

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The Crawford Court found that the district court’s reduced fee

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awards did not comply with Gisbrecht because the awards “rest[ed] on

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lodestar calculations and reject[ed] the primacy of lawful attorney-

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client fee agreements.”

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Gisbrecht, 535 U.S. at 793).

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district court may not start with the lodestar calculation, and may

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consider the lodestar calculation “only as an aid in assessing the

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reasonableness of the fee.”

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According to Crawford, because the fees requested in each of the three

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cases were “significantly lower” than the 25 percent “bargained for”

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amounts, the fees requested were not “excessively large in relation to

Crawford, 586 F.3d at 1150 (quoting
The Crawford Court stated that the

Id. at 1151 (emphasis original).

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9/

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The Court takes judicial notice of the docket and records in the
underlying actions appealed in Crawford. See Mir v. Little Company of
Mary Hosp., 844 F.2d 646, 649 (9th Cir. 1988) (court may take judicial
notice of court records).
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the benefits achieved,” and no downward adjustment was required.

Id.

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at 1151.

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reasonable translated to de facto hourly rates for combined paralegal

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and attorney time of $519 in one case, $875 in another, and $902 in

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the third.

The fees the Crawford Court ultimately approved as

Id. at 1153.10/

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Thus, according to Crawford, a section 406(b) request under a

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contingency fee agreement that translates to a de facto hourly rate of

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as much as $902 for combined attorney and paralegal time does not

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present a circumstance where “the benefits are large in comparison to

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the amount of time spent on the case,” (assuming all other relevant

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considerations are the same as the considerations existing in

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Crawford).

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above, unlike the plaintiffs’ attorneys in Crawford, Plaintiff’s

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counsel is not seeking a total recovery far less than the full 25

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percent fee.11/

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fee; the total fees counsel has sought to recover under Section 406(a)

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and Section 406(b) equal 25 percent of past-due benefits.

The present case is materially distinguishable.

As noted

Plaintiff’s counsel is seeking the full 25 percent

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Moreover, in the present case, unlike Crawford, the paralegal

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hours comprise almost half of the reported time (9.33 paralegal hours

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to 10.7 counsel hours).

By contrast, in the three consolidated cases

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10/

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These de facto hourly rates are taken from Judge Clifton’s
concurring and dissenting opinion in Crawford. The Crawford majority
opinion did not take issue with Judge Clifton’s calculation of these
rates. See Crawford, 586 F.3d at 1145-46.

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11/

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“The attorneys [in the Crawford cases] themselves suggested that
the full 25% fee provided for by their fee agreements would be
unreasonable.” Crawford, 586 F.3d at 1150 n.8.
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in Crawford, the reported times were: (1) 4.5 paralegal hours and 19.5

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counsel hours (Crawford); (2) 4.7 paralegal hours and 17.45 counsel

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hours (Washington); and (3) 2.6 paralegal hours and 26.9 counsel hours

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(Trejo).

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have deemed reasonable the combined attorney and paralegal hourly

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rates in those three consolidated cases in part because, in all three

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cases, the attorney time dwarfed the paralegal time.

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circumstance in the present case.

See Crawford, 586 F.3d at 1145-46.

The Crawford Court may

Such is not the

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This Court looks to the allocation of time spent and the fee

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requested to determine if some downward adjustment is in order to

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account for the substantial time spent by the paralegals relative to

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the time spent by counsel.

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*4 (D. Or. Oct. 28, 2013) (“Quinnin”), the court awarded a reduced fee

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of approximately 15 percent of past-due benefits yielding a de facto

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hourly rate of $1,240 for attorney time and $620 for paralegal time,

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where most of the work in the case had been done by a paralegal.

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court assumed the paralegal’s billable rates were half of attorney

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rates and found a de facto hourly rate of $1,000 for attorney time and

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$500 for paralegal time “a helpful guide” in assessing reasonableness.

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See id.

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Quinnin court found helpful, a reasonable award in this case would be

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$15,365 for combined counsel and paralegal time (i.e., 10.7 counsel

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hours x $1,000 = $10,700; 9.33 paralegal hours x $500 = $4,665).

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Here, counsel’s total Section 406(b) fee request of $22,560.23 well

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exceeds that amount, and the net 406(b) request of $16,560.23 exceeds

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that amount by $1,195.23.

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///

In Quinnin v. Colvin, 2013 WL 5786988, at

The

If this Court follows the $1,000/$500 de facto rates the

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This Court previously has approved a de facto hourly rate for

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attorney time of $1,100 per hour.

See Farnworth v. Colvin, CV 12-400-

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E (C.D. Cal. Dec. 2, 2013) (Docket No. 22) (order awarding reduced

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fees of $1,100 per hour for work performed in 2012, in comparison to

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the Crawford award for work done prior to 2009; award was half of

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original request for a fee which equated to a $2,199 de facto hourly

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rate).

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facto hourly rate for counsel is $1,100 per hour, and a reasonable de

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facto rate for a paralegal is $550 per hour, a reasonable Section

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406(b) award in this case would be $16,901.50 (i.e., 10.7 counsel

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hours x $1,100 = $11,770; 9.33 paralegal hours x $550 = $5,131.50).

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This calculation yields an amount which is $341.27 more than the

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$16,560.23 net Section 406(b) fee counsel seeks (though far less than

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the total Section 406(b) fee sought).

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appears reasonable when the Court considers the fact that: (1) all of

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counsel’s work in this case occurred in 2015 and the paralegals’ work

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occurred in 2013, 2014, and 2017; and (2) in Farnworth, all of the

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work occurred in 2012.

Following Quinnin’s logic, and assuming that a reasonable de

The net fee requested also

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Accordingly, the Court finds that the net Section 406(b) fee

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counsel seeks of $16,560.23 is reasonable.

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the $6,000 in section 406(a) fees counsel already received, will

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provide counsel with 25 percent of past-due benefits.

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Crawford decision of Ellick v. Barnhart, 445 F. Supp. 2d 1166, 1173

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(C.D. Cal. Aug. 17, 2006), this Court acknowledges the regrettable

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imprecision of the analysis through which the Court has determined a

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“reasonable” fee.

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This award, together with

As in the pre-

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ORDER

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Section 406(b) fees are allowed in the amount of $16,560.23 to be

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paid out of the sums withheld by the Commissioner from Plaintiff’s

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benefits.

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previously paid by the Government under the EAJA.

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reimburse Plaintiff for the $6,000 in fees counsel previously received

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from the Administration under Section 406(a).

Counsel shall reimburse Plaintiff in the amount of $2,400
Counsel need not

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IT IS SO ORDERED.

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DATED: September 6, 2017.

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/s/
CHARLES F. EICK
UNITED STATES MAGISTRATE JUDGE

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