Gipson v. Commissioner of Social Security

Filing 26

Order GRANTING 22 25 Motion for Attorney Fees pursuant to 42 U.S.C. § 406(b), signed by Magistrate Judge Erica P. Grosjean on 6/28/2018. (Rosales, O)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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JOHN L. GIPSON,
Plaintiff,

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

v.

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Case No. 1:14-cv-01709-EPG

NANCY A. BERRYHILL, Acting
Commissioner of Social Security,

(ECF Nos. 22, 25)

Defendant.

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I.

INTRODUCTION

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Young Chul Cho of the Law Offices of Lawrence D. Rohlfing, attorney for John L.

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Gipson (“Plaintiff”), filed a Motion for Attorney’s Fees Pursuant to 42 U.S.C. § 406(b) on

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April 23, 2018. (ECF No. 22). Plaintiff and the Commissioner of Social Security (“Defendant”

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or “Commissioner”) were served with the motion. (ECF No. 22 at 11). Plaintiff has not filed

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any opposition to the motion. Defendant filed a response to the motion on June 1, 2018, and

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indicated that it has no opposition to the motion. (ECF No. 25). For the reasons set forth below,

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the motion for attorney’s fees is granted.

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II.

BACKGROUND
On October 30, 2014, Plaintiff commenced this action for judicial review of a final

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denial of an application for disability benefits under the Social Security Act by the

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Commissioner of the Social Security Administration. (ECF No. 1.) On October 20, 2015, upon
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the stipulation of the parties, the Court remanded this matter and issued judgment in favor of

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Plaintiff. (ECF Nos. 18, 19.)
On January 4, 2016, counsel was awarded attorneys’ fees in the amount of $4,100.00

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under the Equal Access to Justice Act (“EAJA”), 28 U.S.C. § 2412(d). (ECF No. 21.) On

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January 5, 2018, the Commissioner determined that Plaintiff has been disabled since April 15,

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2011. (ECF No. 22-2 at 12). On February 1, 2018, the Commissioner awarded Plaintiff benefits

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in the amount of $105,149.00. (ECF No. 22-3 at 3.)
Plaintiff’s counsel now moves for attorney’s fees in the amount of $20,200.00 pursuant

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to 42 U.S.C. § 406(b), less $4,100.00 for the EAJA fees previously paid. (ECF No. 22 at 3).

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Counsel states that Plaintiff entered into a contingency fee agreement whereby the Law Offices

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of Lawrence D. Rohlfing would receive a fee of 25% of the backpay awarded upon reversal of

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an unfavorable determination by the Commissioner. Id. Counsel contends that the fees are

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reasonable as he has expended 25.8 hours of work on this matter, and is requesting less than

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25% of the benefit award. Id.

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III.

DISCUSSION
Pursuant to the Social Security Act, attorneys may seek a reasonable fee for cases in

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which they have successfully represented social security claimants. Section 406(b) provides

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the following in relevant part:

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Whenever a court renders a judgment favorable to a claimant under
this subchapter who was represented before the court by an
attorney, the court may determine and allow as part of its judgment
a reasonable fee for such representation, not in excess of 25 percent
of the total of the past-due benefits to which the claimant is entitled
by reason of such judgment, and the Commissioner of Social
Security may . . . certify the amount of such fee for payment to
such attorney out of, and not in addition to, the amount of such
past-due benefits.

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42 U.S.C. § 406(b)(1)(A) (emphasis added). “In contrast to fees awarded under fee-shifting

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provisions such as 42 U.S.C. § 1988, the fee is paid by the claimant out of the past-due benefits

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awarded; the losing party is not responsible for payment.” Crawford v. Astrue, 586 F.3d 1142,

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1147 (9th Cir.2009) (en banc) (citing Gisbrecht v. Barnhart, 535 U.S. at 789, 802 (2002)).

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However, the Commissioner has standing to challenge the award, despite the fact that the
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Section 406(b) attorney's fee award is not paid by the government. Craig v. Sec ‘y Dep't of

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Health & Human Servs., 864 F.2d 324, 328 (4th Cir.1989), abrogated on other grounds in

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Gisbrecht, 535 U.S. at 807. The goal of fee awards under Section 406(b) is to provide adequate

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incentive to represent claimants while ensuring that the usually meager disability benefits

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received are not greatly depleted. Cotter v. Bowen, 879 F.2d 359, 365 (8th Cir.1989),

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abrogated on other grounds in Gisbrecht, 535 U.S. at 807.
The twenty-five percent (25%) maximum fee is not an automatic entitlement, and courts
are required to ensure that the requested fee is reasonable. Gisbrecht, 535 U.S. at 808–09
(Section 406(b) does not displace contingent-fee agreements within the statutory ceiling;

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instead, Section 406(b) instructs courts to review for reasonableness fees yielded by those
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agreements). “Within the 25 percent boundary . . . the attorney for the successful claimant must
show that the fee sought is reasonable for the services rendered.” Id. at 807; see also Crawford,

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586 F.3d at 1148 (holding that Section 406(b) “does not specify how courts should determine

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whether a requested fee is reasonable” but “provides only that the fee must not exceed 25% of

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the past-due benefits awarded”).

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Generally, “a district court charged with determining a reasonable fee award under §

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406(b)(1)(A) must respect ‘the primacy of lawful attorney-client fee arrangements,’. . . ‘looking

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first to the contingent-fee agreement, then testing it for reasonableness.’” Crawford, 586 F.3d at

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1148 (quoting Gisbrecht, 535 U.S. at 793, 808). The United States Supreme Court has

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identified several factors that may be considered in determining whether a fee award under a

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contingent-fee agreement is unreasonable and therefore subject to reduction by the court: (1)

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the character of the representation; (2) the results achieved by the representative; (3) whether

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the attorney engaged in dilatory conduct in order to increase the accrued amount of past-due

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benefits; (4) whether the benefits are large in comparison to the amount of time counsel spent

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on the case; and (5) the attorney’s record of hours worked and counsel’s regular hourly billing
charge for non-contingent cases. Id. (citing Gisbrecht, 535 U.S. at 807–08).
Here, Plaintiff entered into a fee agreement that provides for attorney’s fees in the
amount of 25% of the backpay benefits. (ECF No. 22-1). The Court has considered counsel’s
representation of Plaintiff and the results achieved by counsel. Plaintiff’s counsel indicates he
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expended a total of 25.8 hours litigating Plaintiff's case and he is seeking 19.21% of the total

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amount of backpay benefits. (ECF No. 22 at 3; 22-4 at 1-2). This represents an hourly rate of

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$782.00. While this hourly rate does appear to be above the market rate range, (ECF No. 22-5

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at 14), counsel has voluntarily reduced the fees substantially from the allowable 25%, and the

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hourly rate is not excessive when compared to what the Ninth Circuit has approved. See,

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e.g., Crawford, 586 F.3d at 1153 (noting the majority’s decision effectively approves

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hourly rates of both attorneys and paralegals of $519, $875, and $902 in three

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separate Social Security cases). Further, there is no indication that a reduction of the award is

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warranted due to any substandard performance by counsel in this matter. Counsel is an

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experienced attorney who secured a successful result for Plaintiff. There is also no evidence

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that counsel engaged in any dilatory conduct resulting in excessive delay. Thus, the $20,200.00

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is not excessive in relation to the past-due award. See generally, Shepard v. The Comm’n of

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Social Security, No. 1:14-cv-1166 SMS, 2016 WL 3549261 (E.D. Cal. June 29, 2016) (granting

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$17,125.00 pursuant to Section 406(b)); Schneider v. The Comm’n of Soc. Sec., No. 14-cv-

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00034 SKO, 2016 WL 2654228 (E.D. Cal., May 10, 2016) (granting $10,253.96); Whiteside v.

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The Comm’n of Soc. Sec., No. 1:13-cv-1337-BAM, 2015 WL 36545054 (E.D. Cal., June 11,

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2015) (granting $6,000.00). In making this determination, the Court recognizes the contingent-

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fee nature of this case and counsel’s assumption of risk in agreeing to represent Plaintiff under

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such terms. See Hearn v. Barnhart, 262 F.Supp.2d 1033, 1037 (N.D. Cal.2003) (“Because

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attorneys [] contend with a substantial risk of loss in Title II cases, an effective hourly rate of

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only $450 in successful cases does not provide a basis for this court to lower the fee to avoid a

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windfall.”).

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An award of Section 406(b) fees, however, must be offset by any prior award of

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attorney’s fees granted under the EAJA. 28 U.S.C. § 2412; Gisbrecht, 535 U.S. at 796. Here,

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the Court previously determined that counsel is entitled to EAJA fees in the amount of

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$4,100.00. Therefore, counsel shall reimburse the amount of $4,100.00 in EAJA fees to be to

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Plaintiff.

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IV.

CONCLUSION AND ORDER
For the reasons stated above, the fees sought by Young Chul Cho pursuant to Section

406(b) are reasonable. Accordingly, IT IS HEREBY ORDERED that:
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The Motion for Attorney’s Fees pursuant to Section 406(b) in the amount of

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$20,200.00, minus the amount of $4,100.00 in EAJA fees to be reimbursed to

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Plaintiff in accordance with 28 U.S.C. § 406(b)(1)(A), (ECF No. 22), is

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GRANTED;

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2.

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The Clerk of the Court is directed to serve this order on Plaintiff, John L.
Gipson at 4708 Wetherby Court, Bakersfield, CA 93311.

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IT IS SO ORDERED.
Dated:

June 28, 2018

/s/
UNITED STATES MAGISTRATE JUDGE

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