Eckert v. Colvin

Filing 27

ORDER by Judge Joseph C. Spero granting 23 Plaintiff's Counsel's Motion for Attorney Fees (jcslc4, COURT STAFF) (Filed on 9/11/2017)

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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 SHARLA DAWN ECKERT, 7 Case No. 15-cv-04461-JCS Plaintiff, 8 v. 9 NANCY A. BERRYHILL, 10 Defendant. ORDER GRANTING PLAINTIFF'S COUNSEL’S MOTION FOR ATTORNEYS’ FEES Re: Dkt. No. 23 United States District Court Northern District of California 11 12 I. INTRODUCTION Plaintiff Sharla Dawn Eckert initiated this action to seek review of the final decision by the 13 14 Commissioner of the Social Security Administration (the “Commissioner”) denying Eckert’s 15 application for disability insurance and Supplemental Security Income (“SSI”) benefits under 16 Titles II and XVI of the Social Security Act (“SSA”). On December 13, 2016, the Court reversed 17 the Commissioner’s decision and remanded for an award of benefits. See S.J. Order (dkt. 18).1 18 On remand, the Commissioner granted Eckert’s application for benefits, entitling her to receive 19 $66,265 in retroactive benefits.2 See Ortega Decl. (dkt. 23) Ex. C. Plaintiff’s counsel, the Law 20 Offices of Charles E. Binder and Harry J. Binder, LLP (the “Firm”), now brings a Motion for 21 Attorney Fees Pursuant to 42 U.S.C. § 406(b), seeking an award of $16,566.25 in attorneys’ fees 22 for work performed before this Court. See generally Mot. (dkt. 23); Ortega Decl. Ex. A. The 23 parties have consented to the jurisdiction of a United States magistrate judge pursuant to 28 U.S.C. 24 § 636(c). For the reasons stated below, the motion is GRANTED. 25 26 27 28 1 2 Eckert v. Colvin, No. 15-cv-04461-JCS, 2016 WL 7212280 (N.D. Cal. Dec. 13, 2016). In Eckert’s award letter, the Commissioner withheld $16,566.25 to allow for the potential award of attorneys’ fees of “no larger than 25 percent of past due benefits,” indicating a total award value of $66,265.00. See Ortega Decl. Ex. C. 1 2 II. BACKGROUND On August 31, 2015, Eckert entered into a contingency-based fee agreement (the “Fee 3 Agreement”) with the Firm, appointing the Firm as her counsel in connection with her appeal from 4 the prior administrative denial of her claims. Ortega Decl. Ex. A. The Fee Agreement provides 5 the Firm with 25% of any past due benefits awarded to Eckert and assigns to the Firm any fees 6 awarded under the Equal Access to Justice Act (“EAJA”). Id. On December 13, 2016, this Court 7 ruled in favor of Eckert, reversing the administrative law judge’s prior denial of benefits and 8 remanding the matter for a calculation and award of benefits consistent with the order. See S.J. 9 Order. On March 3, 2017, this Court signed a stipulation awarding the Firm $5,156.73 in attorneys’ fees and $400 in costs under the EAJA. EAJA Award (dkt. 22). On April 11, 2017, the 11 United States District Court Northern District of California 10 Social Security Administration issued an award letter to Eckert where it indicated it was 12 withholding $16,566.25, or 25% of the total past due award, pending the Court’s determination of 13 attorneys’ fees. Ortega Decl. Ex. C at 4. 14 In the present motion, the Firm urges the Court to direct the Commissioner to pay the Firm 15 $16,566.25 for work performed in this Court with a credit to Eckert for $5,156.73 already paid in 16 attorneys’ fees under the EAJA. Mot. at 1, 8. The Firm contends this fee is reasonable because it 17 equals the contractually agreed upon amount under the retainer agreement and does not exceed the 18 25% statutory limit under 42 U.S.C. § 406(b)(1)(A). Mot. at 3–4; 42 U.S.C. § 406(b)(1)(A); 19 Ortega Decl. Ex. A. The Firm also argues that the sought fee is reasonable and fair in light of the 20 favorable results achieved, time expended on the case, the Firm’s expertise in the field, the 21 significant risk presented to the Firm due to repeated prior denials, and the absence of excessive 22 delay or fraud. Mot. at 3–7. According to the Firm, it expended 26.9 hours before the Court on 23 Eckert’s case. Ortega Decl. Ex. B. The Firm also notes that “Ms. Eckert would immediately be 24 credited $5,156.73, the amount of the EAJA fee award already awarded, should the instant motion 25 be granted.” Mot. at 8. 26 In response to the motion, the Commissioner filed a Statement of Nonparty Analysis, 27 wherein she indicates that she has “no objection to the fee request for the lesser amount of 28 $16,566.25,” noting the Firm’s indication that it would reimburse Eckert with the amount of the 2 1 EAJA award. Comm’r’s Statement (dkt. 24). On August 8, 2017, this Court issued an Order to Show Cause (“OSC”) why the order 2 3 should not be denied for failure to demonstrate that Eckert received a copy of the motion and its 4 attachments. See OSC (dkt. 25). In response, the Firm stated that it had mailed a copy of the 5 motion and its attachments to Eckert by first-class mail on April 26, 2017. Response (dkt. 26) at 6 2. The Firm also indicated that it sent Eckert another copy of the motion and attached documents 7 on August 9, 2017 through FedEx, and attached a copy of the confirmation of receipt with 8 Eckert’s signature on August 10, 2017. Id.; Response Ex. B. Eckert has not filed a response or 9 objection to the motion. 10 United States District Court Northern District of California 11 12 13 14 15 16 17 III. ANALYSIS The scheme established by Congress for attorney fee awards in cases involving social security claims is described by the Supreme Court as follows: Fees for representation of individuals claiming Social Security oldage, survivor, or disability benefits, both at the administrative level and in court, are governed by prescriptions Congress originated in 1965. Social Security Amendments of 1965, 79 Stat. 403, as amended, 42 U.S.C. § 406. . . . The statute deals with the administrative and judicial review stages discretely: § 406(a) governs fees for representation in administrative proceedings; § 406(b) controls fees for representation in court. See also 20 CFR § 404.1728(a) (2001). 18 Gisbrecht v. Barnhart, 535 U.S. 789, 793–94 (2002). 42 U.S.C. § 406(b) provides, in relevant 19 part, that “[w]henever a court renders a judgment favorable to a claimant under this subchapter 20 who was represented before the court by an attorney, the court may determine and allow as part of 21 its judgment a reasonable fee for such representation, not in excess of 25 percent of the total of the 22 past-due benefits to which the claimant is entitled by reason of such judgment, and the 23 Commissioner of Social Security may . . . certify the amount of such fee for payment to such 24 attorney out of, and not in addition to, the amount of such past-due benefits.” 42 U.S.C. § 406(b). 25 Under Gisbrecht, courts should “approach fee determinations [under § 406(b)] by looking 26 first to the contingent-fee agreement, then testing it for reasonableness,” and may reduce the 27 recovery “based on the character of the representation and the results the representative achieved.” 28 Gisbrecht, 535 U.S. at 808. The Ninth Circuit has applied Gisbrecht to mean that “court[s] may 3 1 properly reduce the fee for substandard performance, delay, or benefits that are not in proportion 2 to the time spent on the case.” Crawford, 586 F.3d at 1151 (citing Gisbrecht 535 U.S. at 808). In 3 this analysis, courts “generally have been deferential to the terms of the contingency fee contracts 4 in subsection 406(b) cases, accepting that the resulting de facto hourly rates may exceed those for 5 non contingency-fee arrangements,” emphasizing that “basing a reasonableness determination on a 6 simple hourly rate basis is inappropriate when an attorney is working pursuant to a reasonable 7 contingency contract for which there runs a substantial risk of loss.” Hearn v. Barnhart, 262 F. 8 Supp. 2d 1033, 1037 (N.D. Cal. 2003). Further, the Ninth Circuit has held that the 25% cap 9 applies only to fees awarded under 42 U.S.C. § 406(b) and does not apply to the total fees awarded under subsections (a) and (b) combined, which may exceed 25% of the award of benefits. 11 United States District Court Northern District of California 10 Clark v. Astrue, 529 F.3d 1211, 1218 (9th Cir. 2008). 12 In addition to the schemes for attorneys’ fees housed within § 406(a) and (b), the Equal 13 Access to Justice Act (“EAJA”), enacted in 1980, allows a party who prevails against the United 14 States in court, including a successful Social Security benefits claimant, to receive an award of 15 fees payable by the United States if the Government’s position in the litigation was not 16 “substantially justified.” Gisbrecht, 535 U.S. at 796 (citing 28 U.S.C. § 2412(d)(1)(A)). In 17 contrast to fees awarded under subsection 406(b), EAJA fees are based on the “time expended” 18 and the attorney’s “[hourly] rate.” 28 U.S.C. § 2412(d)(1)(B). In Gisbrecht, the Supreme Court 19 explained that “Congress harmonized fees payable by the Government under EAJA with fees 20 payable under § 406(b) out of the claimant’s past-due Social Security benefits in this manner: Fee 21 awards may be made under both prescriptions, but the claimant’s attorney must ‘refun[d] to the 22 claimant the amount of the smaller fee.’” Gisbrecht, 535 U.S. at 796 (quoting Act of Aug. 5, 23 1985, Pub. L. No. 99–80, § 3, 99 Stat. 186 (1985)). Accordingly, “an EAJA award offsets an 24 award under [42 U.S.C. § 406(b)],” increasing “up to the point the claimant receives 100 percent 25 of the past-due benefits.” Id. 26 Here, the Firm seeks an award of $16,566.25 in fees, which amounts to 25% the total 27 award of past due benefits made by the Commissioner on remand. See Mot.; Ortega Decl. Ex. A. 28 While the sought hourly rate of $616 is substantially higher than the hourly rate of $191.70 for the 4 1 EAJA award, courts “generally have been deferential to the terms of the contingency fee contracts 2 in § 406(b) cases.” Hearn, 262 F. Supp. 2d at 1037; see EAJA Award. In light of this general 3 deference to contingency agreements, the prompt and effective legal assistance the Firm provided 4 Eckert, and the risk of litigation in light of multiple prior administrative denials, the Court finds 5 this award to be reasonable. The Court finds no basis for reducing this fee, as there was no 6 evidence of “substandard performance, delay, or benefits that are disproportionate to the time 7 spent on the case.” See Crawford, 586 F.3d at 1149. Accordingly, the Court finds that the Firm is 8 entitled to the $16,566.25 in fees sought in this motion. The Firm was previously awarded $5,156.73 in EAJA attorneys’ fees for work performed 9 before this court. See EAJA Award. For cases where fees are awarded under both EAJA and 11 United States District Court Northern District of California 10 § 406(b), counsel is required to refund the lesser of the two awards to the client such that the 12 EAJA offsets the § 406(b) award. Gisbrecht, 535 U.S. at 796. Accordingly, and because the 13 Court now grants the Firm’s motion for § 406(b) fees, the Court orders the Firm to immediately 14 refund the EAJA award amount of $5,156.73 to Eckert. 15 IV. CONCLUSION 16 For the reasons stated above, the motion is GRANTED. The Commissioner is directed to 17 certify fees under 42 U.S.C. § 406(b) in the amount of $16,566.25, payable to the Law Offices of 18 Charles E. Binder and Harry J. Binder, LLP. The Firm is directed to immediately refund 19 $5,156.73 in EAJA fees to Eckert. 20 21 22 23 IT IS SO ORDERED. Dated: September 11, 2017 ______________________________________ JOSEPH C. SPERO Chief Magistrate Judge 24 25 26 27 28 5

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