Jose Guadalupe Lupercio v. Nancy A. Berryhill

Filing 33

ORDER by Magistrate Judge Kenly Kiya Kato: granting 29 MOTION for Attorney Fees. Fees awarded in favor of Jose Guadalupe Lupercio against Nancy A. Berryhill in the amount of $14,244.00 with a reimbursement to Plaintiff for EAJA fees previously awarded in the amount of $744.01. (dts)

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1 2 3 4 5 6 UNITED STATES DISTRICT COURT 7 CENTRAL DISTRICT OF CALIFORNIA 8 9 10 Case No. EDCV 18-966-KK JOSE L., 1 11 Plaintiff, v. 12 ORDER GRANTING MOTION FOR ATTORNEY FEES PURSUANT TO 42 U.S.C. § 406(b) ANDREW SAUL, 2 Commissioner of Social Security, 13 14 Defendant. 15 16 17 I. 18 INTRODUCTION 19 Plaintiff Jose L. (“Plaintiff”)’s counsel, William M. Kuntz of William Kuntz 20 Law Offices PLC (“Counsel”), filed a Motion for Attorney Fees (“Motion”) pursuant 21 to 42 U.S.C. § 406(b) (“Section 406(b)”). The Motion seeks an award of $14,244.00 22 for representing Plaintiff in an action to obtain disability insurance benefits, with a 23 refund to Plaintiff of $744.01 for the Equal Access to Justice Act (“EAJA”) fees 24 previously awarded. The parties have consented to the jurisdiction of the undersigned 25 26 27 28 Partially redacted in compliance with Federal Rule of Civil Procedure 5.2(c)(2)(B) and the recommendation of the Committee on Court Administration and Case Management of the Judicial Conference of the United States. 2 The Court substitutes Andrew Saul, the current Commissioner of Social Security, as Defendant in this action. Fed. R. Civ. P. 25(d). 1 1 United States Magistrate Judge, pursuant to 28 U.S.C. § 636(c). For the reasons stated 2 below, the Court GRANTS the Motion. 3 II. 4 RELEVANT BACKGROUND 5 On May 6, 2018, Plaintiff filed the Complaint in this action. ECF Docket No. 6 (“Dkt.”) 1, Compl. Plaintiff alleged the Commissioner of the Social Security 7 Administration (“Defendant”) improperly denied Plaintiff’s application for Title II 8 Disability Insurance Benefits (“DIB”) and Title XVI Supplemental Security Income 9 Benefits (“SSI”). Id. On March 20, 2019, the Court entered Judgment remanding the 10 case for further administrative proceedings. Dkt. 25, Order; Dkt. 26, Judgment. 11 On June 18, 2019, the Court issued an order granting Counsel’s Motion for 12 EAJA Fees awarding fees to Counsel in the amount of $ 2,616.13. 3 Dkt. 24, Order 13 Granting EAJA Fees. 14 On August 15, 2020, Counsel filed the instant Motion pursuant to Section 15 406(b) seeking attorney fees in the amount of $14,244.00. Dkt. 29, Mot. Counsel 16 states 12 hours and 55 minutes of attorney time were spent representing Plaintiff in 17 federal court. Dkt. 29 at 21-22, Declaration of William M. Kuntz (“Kuntz Decl.”), ¶ 18 5, Ex. 4. Counsel seeks compensation pursuant to a contingency agreement dated 19 June 8, 2017, which provides that if Plaintiff prevails in federal court, Counsel is 20 entitled to twenty-five percent (25%) of the past due benefits. Id., ¶ 2, Ex. 1. 21 On August 15, 2020, Counsel served Plaintiff with the Motion and informed 22 him that he had a right to file a response to the Motion within fourteen days of receipt 23 of his copy of the Motion. Dkt. 29 at 2, 23. Plaintiff has not filed a response to the 24 Motion. 25 26 27 28 $1,872.12 was withheld from the $2,616.13 EAJA award in satisfaction of Plaintiff’s prior debt, resulting in a net payment to Counsel of $744.01. Dkt. 28, Mot. at 1-2, Ex. 8. 2 3 1 On August 18, 2020, Defendant filed a Response to the Motion. Dkt. 30. 2 Defendant provides an analysis of the fee request but “takes no position on the 3 reasonableness fee request.” Id. at 5. 4 The matter thus stands submitted. 5 III. 6 DISCUSSION 7 A. APPLICABLE LAW 8 Pursuant to Section 406(b): 9 Whenever a court renders a judgment favorable to a claimant under this 10 subchapter who was represented before the court by an attorney, the 11 court may determine and allow as part of its judgment a reasonable fee 12 for such representation, not in excess of 25 percent of the total of the 13 past-due benefits to which the claimant is entitled by reason of such 14 judgment, and the Commissioner of Social Security may . . . certify the 15 amount of such fee for payment to such attorney out of, and not in 16 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] fees 18 are payable only out of the benefits recovered; in amount, such fees may not exceed 19 25 percent of past-due benefits.” Gisbrecht v. Barnhart, 535 U.S. 789, 792, 122 S. Ct. 20 1817, 152 L. Ed. 2d 996 (2002). 21 Where a claimant entered into a contingent fee agreement with counsel, a court 22 must apply Section 406(b) “to control, not to displace, fee agreements between Social 23 Security benefits claimants and their counsel.” Id. at 793. A court should not use a 24 “lodestar method,” under which a district court “determines a reasonable fee by 25 multiplying the reasonable hourly rate by the number of hours reasonably expended 26 on the case.” Crawford v. Astrue, 586 F.3d 1142, 1148 (9th Cir. 2009) (en banc). 27 Rather, where the claimant and counsel entered into a lawful contingent fee 28 agreement, courts that use the “lodestar” method as the starting point to determine 3 1 the reasonableness of fees requested under Section 406(b) improperly “reject the 2 primacy of lawful attorney-client fee agreements.” Gisbrecht, 535 U.S. at 793. Thus, 3 courts should not apply lodestar rules in cases where the claimant and counsel reached 4 a contingent fee agreement because: 5 [t]he lodestar method under-compensates attorneys for the risk they 6 assume in representing [social security] claimants and ordinarily produces 7 remarkably smaller fees than would be produced by starting with the 8 contingent-fee agreement. A district court’s use of the lodestar to 9 determine a reasonable fee thus ultimately works to the disadvantage of 10 [social security] claimants who need counsel to recover any past-due 11 benefits at all. 12 Crawford, 586 F.3d at 1149. 13 However, even in contingency fee cases, a court has “an affirmative duty to 14 assure that the reasonableness of the fee [asserted by counsel] is established.” Id. The 15 court must examine “whether the amount need be reduced, not whether the lodestar 16 amount should be enhanced.” Id. The court may consider factors such as the 17 character of the representation, the results achieved, the ratio between the amount of 18 any benefits awarded and the time expended, and any undue delay attributable to 19 counsel that caused an accumulation of back benefits in determining whether a lawful 20 contingent fee agreement is reasonable. See Gisbrecht, 535 U.S. at 808; Crawford, 21 586 F.3d at 1151. 22 Additionally, the Court must determine whether a previously awarded EAJA 23 fee should be refunded to Plaintiff in the event both Section 406(b) and EAJA fees 24 are awarded. “Congress harmonized fees payable by the [Agency] under EAJA with 25 fees payable under § 406(b) out of the claimant’s past-due Social Security benefits in 26 this manner: Fee awards may be made under both prescriptions, but the claimant’s 27 attorney must ‘refun[d] to the claimant the amount of the smaller fee.’” Gisbrecht, 28 535 U.S. at 796. 4 1 B. 2 ANALYSIS Here, Counsel seeks a reasonable fee under Section 406(b). Plaintiff retained 3 Counsel to represent him in federal court in an appeal from the administrative denial 4 of benefits and agreed to pay Counsel a contingent fee of twenty-five percent of any 5 past due benefits obtained for work performed in court. See Kuntz Decl., Ex. 1. 6 Consideration of the factors set forth in Gisbrecht and Crawford warrants no 7 reduction of the fee Counsel seeks. 8 The record discloses no issue regarding the quality or efficiency of Counsel’s 9 representation before this Court, or any misconduct or delay by Counsel. Counsel 10 obtained a favorable outcome for Plaintiff, ultimately resulting in a remand for further 11 administrative proceedings and an award of past due benefits. See dkt. 25, Judgment; 12 Kuntz Decl., ¶ 4, Exs. 3A, 3B. Further, the time expended to litigate this case, i.e. 13 approximately 13 hours, was reasonable and within the approved range for social 14 security disability cases. See Patterson v. Apfel, 99 F. Supp. 2d 1212, 1214 & n.2 15 (C.D. Cal. 2000) (noting that “a survey of several dozen cases in which attorney’s fees 16 were awarded in social security cases suggests that the 33.75 hours spent by plaintiff’s 17 counsel falls within the approved range”). 18 In addition, a fee of $14,244.00 based on approximately 13 hours of attorney 19 time is reasonable. See Kuntz Decl., ¶ 5, Ex. 4. The Court finds Counsel’s effective 20 hourly rate of approximately $1,102.48 4 reasonable under the circumstances. See Villa 21 v. Astrue, No. CIV S-06-0846 GGH, 2010 WL 118454, at *1-2 (E.D. Cal. Jan. 7, 22 2010) (approving Section 406(b) fees exceeding $1,000.00 per hour, and noting 23 “[r]educing [Section] 406(b) fees after Crawford is a dicey business”). Further, post- 24 Gisbrecht decisions have approved contingency fee agreements yielding substantially 25 higher hourly rates to the rate Counsel seeks. See, e.g., Daniel v. Astrue, No. EDCV 26 04-01188-MAN, 2009 WL 1941632, at *2-3 (C.D. Cal. July 2, 2009) (approving fees 27 28 4 The Court’s calculation is achieved by dividing $14,244.00 by 12.92 hours of time. 5 1 amounting to $1,491.25 per hour); see also Palos v. Colvin, No. CV 15-04261-DTB, 2 2016 WL 5110243, at *2 (C.D. Cal. Sept. 20, 2016) (finding “an hourly rate of 3 $1,546.39 for attorney and paralegal services” is reasonable). Hence, in light of the 4 hours Counsel expended, the Section 406(b) fee award amount Counsel requests 5 would not represent an unfair windfall to Counsel. 6 Additionally, nothing in the record suggests any overreaching in the making of 7 the fee agreement or any impropriety on the part of Counsel in representing Plaintiff. 8 Counsel assumed the risk of nonpayment inherent in a contingency agreement and 9 Counsel’s efforts proved successful for Plaintiff. Accordingly, the Court finds the 10 Section 406(b) fees Counsel requests reasonable. 11 IV. 12 ORDER 13 Based on the foregoing, IT IS HEREBY ORDERED (1) Counsel’s Motion 14 for Attorney Fees Pursuant to Section 406(b) is GRANTED; (2) Defendant is 15 directed to pay Counsel the sum of $14,244.00 with a reimbursement to Plaintiff for 16 EAJA fees previously awarded in the amount of $744.01. 17 18 19 20 Dated: September 09, 2020 HONORABLE KENLY KIYA KATO United States Magistrate Judge 21 22 23 24 25 26 27 28 6

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