De Gowin v. Commissioner of Social Security

Filing 42

FINDINGS and RECOMMENDATIONS signed by Magistrate Judge Deborah Barnes on 02/05/18 RECOMMENDING that the 39 Motion for Attorney Fees be granted; counsel for plaintiff be awarded $17,028.75; the Commissioner be directed to pay the fee forthwi th and remit to plaintiff the remainder any withheld benefits; and upon receipt of the $17,028.75 in attorney fees, counsel be directed to reimburse plaintiff any amount previously paid by the government under the EAJA. Referred to Judge Kimberly J. Mueller; Objections to these F&Rs due within 14 days. (Benson, A.)

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UNITED STATES DISTRICT COURT

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FOR THE EASTERN DISTRICT OF CALIFORNIA

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THOMAS DEGOWIN,

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Plaintiff,

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No. 2:14-cv-2463 KJM DB

v.

FINDINGS AND RECOMMENDATIONS

NANCY A. BERRYHILL, Acting
Commissioner of Social Security,

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Defendant.

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Plaintiff brought this action seeking judicial review of a final administrative decision

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denying his application for Disability Insurance Benefits under Title II of the Social Security Act.

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On February 4, 2016, following the filing of a motion for summary judgment by plaintiff and a

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cross-motion for summary judgment by defendant, the previously assigned Magistrate Judge

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issued findings and recommendations recommending that plaintiff’s motion for summary

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judgment be granted, defendant’s cross-motion be denied, the decision of the Commissioner of

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Social Security be reversed, and that this matter be remanded for further proceedings.1 (ECF No.

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23.) Those findings and recommendations were adopted in full by the assigned District Judge on

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March 22, 2016. (ECF No. 25.)

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This matter was reassigned to the undersigned on August 3, 2016. (ECF No. 30.)
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On November 6, 2017, counsel for plaintiff filed a motion for an award of attorney’s fees

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pursuant to 42 U.S.C. § 406(b). (ECF No. 39.) In support of that motion, counsel has provided a

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copy of the contingent-fee agreement entered into between plaintiff and plaintiff’s counsel. (ECF

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No. 39-1 at 1-3.2) The contingent-fee agreement permitted plaintiff’s counsel to seek “up to 25%

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of all past due benefits” awarded. (Id. at 1.) Pursuant to that agreement plaintiff’s counsel now

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seeks attorney’s fees in the amount of $17,028.75, which represents 24% of the retroactive

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disability benefits received by plaintiff on remand, for approximately 36.3 hours of attorney time

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expended on this matter.3 (ECF No. 39 at 1, 4; ECF No. 39-3 at 1.) Defendant filed a response to

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plaintiff’s motion on April 18, 2017. (ECF No. 40.)

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Attorneys are entitled to fees for cases in which they have successfully represented social
security claimants.

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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). “In contrast to fees awarded under fee-shifting provisions such as 42

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U.S.C. § 1988, the fee is paid by the claimant out of the past-due benefits awarded; the losing

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party is not responsible for payment.” Crawford v. Astrue, 586 F.3d 1142, 1147 (9th Cir. 2009)

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(en banc) (citing Gisbrecht v. Barnhart, 535 U.S. 789, 802 (2002)). Although an attorney fee

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award pursuant to 42 U.S.C. § 406(b) is not paid by the government, the Commissioner has

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Page number citations such as this one are to the page number reflected on the court’s CM/ECF
system and not to page numbers assigned by the parties.
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Plaintiff’s counsel notes that the Social Security Administration withheld $23,028.75 for
attorney fees, but counsel here is only seeking $17,028.75 because plaintiff’s counsel at the
administrative level requested $6,000 in attorney’s fees under 42 U.S.C. § 406(a). (ECF No. 39
at 4.) In this regard, counsel here sought to ensure that the “combined 406(a) and 406(b) fee . . .
will not exceed 25% of Plaintiff’s back benefits, consistent with the fee agreement.” (Id.)
Nonetheless, the “plain text of 42 U.S.C. § 406(b) limits only the amount of attorney’s fees
awarded under § 406(b), not the combined fees awarded under § 406(a) and § 406(b), to 25% of
the claimant’s past-due benefits.” Clark v. Astrue, 529 F.3d 1211, 1218 (9th Cir. 2008).
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standing to challenge the award. Craig v. Sec’y Dep’t of Health & Human Servs., 864 F.2d 324,

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328 (4th Cir. 1989). The goal of fee awards under § 406(b) is to provide adequate incentive to

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attorneys for representing 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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The 25% statutory maximum fee is not an automatic entitlement, and the court must

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ensure that the fee actually requested is reasonable. Gisbrecht, 535 U.S. at 808-09 (“[Section]

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406(b) does not displace contingent-fee agreements within the statutory ceiling; instead, § 406(b)

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instructs courts to review for reasonableness fees yielded by those agreements.”). “Within the 25

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percent boundary . . . the attorney for the successful claimant must show that the fee sought is

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reasonable for the services rendered.” Id. at 807. “[A] district court charged with determining a

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reasonable fee award under § 406(b)(1)(A) must respect ‘the primacy of lawful attorney-client fee

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arrangements,’ ‘looking first to the contingent-fee agreement, then testing it for reasonableness.’”

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Crawford, 586 F.3d at 1149 (quoting Gisbrecht, 535 U.S. at 793 & 808).

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The Supreme Court has identified five factors that may be considered in determining

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whether a fee award under a contingent-fee arrangement is unreasonable and therefore subject to

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reduction by the court: (1) the character of the representation; (2) the results achieved by the

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representative; (3) whether the attorney engaged in dilatory conduct in order to increase the

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accrued amount of past-due benefits; (4) whether the benefits are large in comparison to the

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amount of time counsel spent on the case; and (5) the attorney’s record of hours worked and

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counsel’s regular hourly billing charge for noncontingent cases. Crawford, 586 F.3d at 1151-52

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(citing Gisbrecht, 535 U.S. at 808). Below, the undersigned will consider these factors in

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assessing whether the fee requested by counsel in this case pursuant to 42 U.S.C. § 406(b) is

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reasonable.

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Here, there is no indication that a reduction of fees is warranted due to any substandard

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performance by counsel. Rather, plaintiff’s counsel is an experienced attorney who secured a

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successful result for the plaintiff. Nor is there evidence that plaintiff’s counsel engaged in any

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dilatory conduct resulting in excessive delay.

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The undersigned also finds that the $17,028.75 fee, which represents 24% of the past-due

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benefits paid to plaintiff, is not excessive in relation to the benefits awarded. In this regard, an

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award of $17,028.75 on 36.3 hours of attorney time expended would represent an hourly rate of

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$469.11. See Hoffman v. Berryhill, No. 2:11-cv-2338 EFB, 2017 WL 4387271, at *1 (E.D. Cal.

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Oct. 3, 2017) (awarding fees representing rate of $587.85 per hour); Mondello v. Astrue, No. Civ

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S-04-973 DAD, 2009 WL 636542, at * 2 (E.D. Cal. Mar. 11, 2009) (awarding fees representing

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rate of $801.00 per hour); Bailey v. Astrue, No. CIV S-06-1497 KJM, 2008 WL 5133965, at *1

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(E.D. Cal. Dec. 5, 2008) (“The hourly rate of $482.14 is also reasonable.”). Moreover, in making

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this determination, the undersigned recognizes the contingent fee nature of this case and counsel’s

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assumption of the risk of going uncompensated in agreeing to represent plaintiff on such terms.

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See Hearn v. Barnhart, 262 F. Supp.2d 1033, 1037 (N.D. Cal. 2003). Finally, counsel has

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submitted a detailed billing statement in support of the requested fee. (ECF No. 39-3 at 1.)

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Defendant argues that, following remand, plaintiff was found disabled “only because he

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turned 60 years old and the Medical-Vocational Guidelines required the agency to find disability

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based on his age change and the limitation to light work.” (ECF No. 40 at 3) (citation omitted).

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In this regard, defendant asserts that plaintiff’s attorney “could have better served Plaintiff by

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advising him to reapply for disability benefits instead of engaging in lengthy federal court

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litigation . . . .” (Id.) The undersigned finds this argument wholly unpersuasive.

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As noted above, “[t]he court may properly reduce the [attorney’s] fee for substandard

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performance, delay, or benefits that are not in proportion to the time spent on the case.”

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Crawford, 586 F.3d at 1151. Here, plaintiff’s counsel’s performance was not substandard, there

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was no delay, and the award is in proportion to the time spent on the case. While the ALJ on

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remand may have found that plaintiff became disabled only because he turned 60 years old, that

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administrative decision is not properly before the court for evaluation. Nor is the question of

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whether plaintiff only became disabled because he turned 60 years old.

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Accordingly, for the reasons stated above, the undersigned finds that the fees sought by

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counsel pursuant to § 406(b) are reasonable. See generally Azevedo v. Commissioner of Social

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Security, No. 1:11-cv-1341 AWI SAB, 2013 WL 6086666, at *2 (E.D. Cal. Nov. 19, 2013)
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(granting petition pursuant to 406(b) for $17,893.75 in attorney’s fees); Coulter v. Commissioner

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of Social Security, No. 1:10-cv-1937 AWI JLT, 2013 WL 5969674, at *2 (E.D. Cal. Nov. 8,

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2013) (recommending award of $15,084.23 in attorney’s fees pursuant to 406(b)); Taylor v.

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Astrue, No. 1:06-cv-00957-SMS, 2011 WL 836740, at *2 (E.D. Cal. Mar. 4, 2011) (granting

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petition pursuant to 406(b) for $20,960 in attorneys’ fees); Jamieson v. Astrue, No. 1:09cv0490

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LJO DLB, 2011 WL 587096, at *2 (E.D. Cal. Feb. 9, 2011) (recommending award of $34,500 in

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attorney fees pursuant to 406(b)).

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An award of § 406(b) fees is, however, offset by any prior award of attorney’s fees

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granted under the Equal Access to Justice Act (“EAJA”). 28 U.S.C. § 2412; Gisbrecht, 535 U.S.

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at 796. Here, on January 19, 2017, the undersigned issued findings and recommendations

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recommending that plaintiff’s counsel be awarded $6,556.99 in EAJA fees. (ECF No. 37.)

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Those findings and recommendations are pending before the assigned District Judge. In the event

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those findings and recommendations are adopted in whole, or part, and plaintiff’s counsel is

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awarded fees under the EAJA, plaintiff’s counsel should be ordered to reimburse plaintiff any

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amount previously paid by the government under the EAJA.

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Accordingly, IT IS HEREBY RECOMMENDED that:

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1. Plaintiff’s November 6, 2017 motion for attorney fees under 42 U.S.C. § 406(b), (ECF

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No. 39), be granted;
2. Counsel for plaintiff be awarded $17,028.75 in attorney fees under § 406(b). The

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Commissioner be directed to pay the fee forthwith and remit to plaintiff the remainder any

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withheld benefits; and

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3. Upon receipt of the $17,028.75 in attorney fees pursuant to § 406(b), counsel be
directed to reimburse plaintiff any amount previously paid by the government under the EAJA.

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These findings and recommendations are submitted to the United States District Judge

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assigned to the case, pursuant to the provisions of 28 U.S.C. § 636(b)(l). Within fourteen days

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after being served with these findings and recommendations, any party may file written

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objections with the court and serve a copy on all parties. Such a document should be captioned

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“Objections to Magistrate Judge’s Findings and Recommendations.” Any reply to the objections
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shall be served and filed within fourteen days after service of the objections. The parties are

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advised that failure to file objections within the specified time may waive the right to appeal the

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District Court’s order. See Martinez v. Ylst, 951 F.2d 1153 (9th Cir. 1991).

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Dated: February 5, 2018

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DLB:6
DB\orders\orders.soc sec\degowin2463.406(b).f&rs

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