Ciletti v. Berryhill

Filing 36

ORDER by Judge Edward M. Chen Granting 32 Plaintiff's Motion for Attorney's Fees. (emcsec, COURT STAFF) (Filed on 1/9/2019)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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STANLEY J. CILETTI,

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Plaintiff,

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United States District Court
Northern District of California

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Case No. 17-cv-05646-EMC
ORDER GRANTING PLAINTIFF’S
MOTION FOR ATTORNEY’S FEES

v.

Docket No. 32

NANCY A. BERRYHILL,
Defendant.

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Following a successful appeal to this Court, Plaintiff was awarded disability benefits under

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Title II of the Social Security Act from the Social Security Administration (“SSA”). Currently

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pending before the Court is Plaintiff’s counsel’s (“Counsel”) motion for attorney’s fees pursuant

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to 42 U.S.C. § 406(b). See Docket No. 32 (“Mot.”). Section 406(b) caps the attorney’s fee award

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in social security benefit cases like this one to 25 percent of the claimant’s past-due disability

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benefits. The amount that Counsel requests, $35,442.00, is slightly less than the statutory limit.

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Plaintiff has submitted a declaration in support of Counsel’s fee motion, see Docket No. 33, and

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the Commissioner of Social Security takes no position on the reasonableness of the fee request,

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see Docket No. 35.

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For the reasons discussed below, Plaintiff’s motion is GRANTED.
I.

BACKGROUND

Plaintiff, a plastic and reconstructive surgeon, applied for social security disability benefits

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in February 2013. Docket No. 25 at 1. The claim was denied in July 2013 and again upon

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reconsideration in March 2014. Id. Plaintiff requested a hearing before an Administrative Law

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Judge (“ALJ”), who denied Plaintiff’s claim in April 2016. Id. The Social Security Appeal

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Council denied Plaintiff’s request to review the ALJ’s decision in July 2017. Id. Plaintiff then

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appealed the ALJ’s decision to this Court. He entered into a contingency fee agreement with

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Counsel that provided for a fee of 25 percent of his past-due benefits in the event that he prevailed.

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Mot. at 2.

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In June 2018, this Court granted Plaintiff’s motion for summary judgment, finding that the

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ALJ’s decision was not supported by substantial evidence, and that Plaintiff is disabled and

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entitled to benefits. See Docket No. 25 at 23–24. Upon remand, the SSA awarded Plaintiff

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disability benefits and informed him that it was withholding 25 percent of his past-due benefits in

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the amount of $37,748.25 for the payment of attorney’s fees pursuant to § 406(b). Mot. at 2. On

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August 31, 2018, the Court approved an award of attorney’s fees to Counsel under the Equal

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United States District Court
Northern District of California

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Access to Justice Act (“EAJA”) in the amount of $12,000. See Docket No. 30.
II.

LEGAL STANDARD

Attorneys representing individuals in social security proceedings may seek fees for their

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work under both the EAJA and § 406(b). While an award under EAJA is paid by the government,

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an award pursuant to § 406(b) is paid out of a successful claimant’s past-due benefits. See 42

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U.S.C. § 406(b)(1)(A); Russell v. Sullivan, 930 F.2d 1443, 1446 (9th Cir. 1991), abrogated

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on other grounds by Sorensen v. Mink, 239 F.3d 1140, 1149 (9th Cir. 2001). Section 406(b)(1)

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provides that a federal court that “renders a judgment favorable to a claimant . . . who was

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represented before the court by an attorney” may grant the attorney “a reasonable fee for such

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representation, not in excess of 25 percent of the total of the past-due benefits to which the

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claimant is entitled by reason of such judgment.” In passing § 406, Congress sought “to protect

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claimants against inordinately large fees and also to ensure that attorneys representing successful

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claimants would not risk nonpayment of [appropriate] fees.” Gisbrecht v. Barnhart, 535 U.S. 789,

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805 (2002). If a court awards fees under both the EAJA and § 406(b), the attorney must reimburse

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the claimant the amount of the smaller fee. Id. at 796.

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The Supreme Court in Gisbrecht explained that § 406(b) is meant “to control, not to

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displace, [contingency] fee agreements between Social Security benefits claimants and their

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counsel.” 535 U.S. at 793. Even if a fee request under § 406(b) is within the 25 percent statutory

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limit, the attorney bears the burden of showing that the fee sought is reasonable, and the court is
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responsible for serving as an “independent check” to ensure the reasonableness of the

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fee. Id. at 807. Following Gisbrecht, the Ninth Circuit has instructed that a § 406(b) fee request

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should be assessed by “looking first to the contingent-fee agreement, then testing it for

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reasonableness.” Crawford v. Astrue, 586 F.3d 1142, 1149 (9th Cir. 2009) (en banc) (quoting

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Gisbrecht, 535 U.S. at 808). The court should consider “the character of the representation and

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the results the representative achieved,” and determine “whether the amount [of fees specified in

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the contingency fee agreement] need be reduced,” for such reasons as “substandard performance,

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delay, or benefits that are not in proportion to the time spent on the case.” Id. at 1151. The

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reasonableness determination is not governed by the lodestar method, because “[t]he lodestar

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method under-compensates attorneys for the risk they assume in representing [social security]

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United States District Court
Northern District of California

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claimants and ordinarily produces remarkably smaller fees than would be produced by starting

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with the contingent-fee agreement.” Id. at 1150. However, “the court may require counsel to

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submit a record of hours spent and a statement of normal hourly billing charges[,] . . . . but only as

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an aid in assessing the reasonableness of the fee.” Id. (emphasis in original).

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III.

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DISCUSSION

The fee agreement between Plaintiff and Counsel provides for a contingency fee of 25

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percent of past-due benefits awarded to Plaintiff. See Rizzo Decl., Exh. A (fee agreement). The

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agreement, and actual fees requested, thus fall within the 25 percent limit set forth in § 406(b).

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See Hearn v. Barnhart, 262 F. Supp. 2d 1033, 1036 (N.D. Cal. 2003) (“[T]he request is within the

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statutory and contract-based maximum of 25% of past-due benefits.”). Looking to the

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reasonableness factors specified in Gisbrecht, “[n]othing . . . suggests that [Counsel’s]

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performance was anything other than excellent.” Crawford, 586 F.3d at 1151. Whereas Plaintiff

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had previously been denied benefits at four stages of the administrative review process, Counsel

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was able to secure a substantial award for Plaintiff through this appeal, including $150,993 in past-

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due benefits, ongoing benefits, and auxiliary benefits for his minor son. See Mot. at 4. Counsel

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also did not delay proceedings; she helped Plaintiff prevail on summary judgment less than eight

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months after this appeal was filed. See Crawford, 586 F.3d at 1151 (“[N]o reduction in fees for

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dilatory conduct was warranted, as the attorneys in these cases caused no excessive delay which
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resulted in an undue accumulation of past-due benefits.”).
Whether Counsel’s fee motion is reasonable thus turns on whether it seeks “benefits that

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are not in proportion to the time spent on the case.” Id. Counsel seeks $35,442.00 in fees, which

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amounts to 23.47% of Plaintiff’s total past-due benefits of $150,993.1 Counsel represents that she

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spent 84.2 hours working on this case. See Docket No. 34 (“Rizzo Decl.”) ¶ 4; id., Exh. D (billing

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records). This translates to a de facto hourly rate of $420.93 (i.e., $35,442 ÷ 84.2 hours).2 Courts

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in this District after Gisbrecht have commonly approved § 406(b) awards for de facto hourly rates

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in the $400 to $600 range. See, e.g., Harrell v. Berryhill, No. 16-CV-02428-MEJ, 2018 WL

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4075883, at *4 (N.D. Cal. Aug. 27, 2018) (awarding rate of $600 per hour); White v. Colvin, No.
14-CV-05584-EMC, 2016 WL 5358587, at *3 (N.D. Cal. Sept. 26, 2016) ($598.14 per hour);

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United States District Court
Northern District of California

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Hearn, 262 F. Supp. 2d at 1036 ($450 per hour); see also Crawford, 586 F.3d at 1153 (Clifton, J.,

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concurring in part and dissenting in part) (noting the court was approving hourly rates of $519,

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$875, and $902).
The requested hourly rate of $420.93 in this case is reasonable given the circumstances.

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To prevail on summary judgment, Counsel reviewed an extensive administrative record and

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identified several material errors by the ALJ, including the ALJ’s failure to properly credit

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Plaintiff’s testimony and physicians’ opinions about Plaintiff’s migraine headaches and knee

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injury, improper decision to afford “great weight” to another examining physician, and incorrect

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conclusion about Plaintiff’s ability to perform work. See Docket No. 25. Moreover, “a substantial

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risk of loss jeopardized [Plaintiff]’s case from the beginning,” as reflected in the fact that his

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“disability claim had already been denied in whole . . . at several levels of agency review prior to

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the initiation of the civil action in federal court.” Hearn, 262 F. Supp. 2d at 1036–37. Counsel, in

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agreeing to a contingency fee arrangement, “assumed the risk of receiving nothing for h[er] time

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and effort if [P]laintiff was unsuccessful.” Id. at 1037. Accordingly, a de facto hourly rate that

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The SSA informed Plaintiff that 25 percent of his past-due benefits amounts to $37,748.25.
Therefore, the total amount of his past-due benefits is $150,993 (i.e., $37,748.25 ÷ 0.25).
Counsel states that the de facto hourly rate is “approximately $505.00,” but this appears to be an
erroneous calculation. Mot. at 6.
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may be higher than the standard hourly rate Counsel would otherwise charge is justified. See id.

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(noting that, post-Gisbrecht, “district courts generally have been deferential to the terms of

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contingency fee contracts in § 406(b) cases, accepting that the resulting de facto hourly rates may

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exceed those for non contingency-fee arrangements”).
IV.

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CONCLUSION

For the foregoing reasons, Plaintiff’s motion for attorney’s fees is GRANTED in the

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amount of $35,442.00, to be paid out of the sums withheld by the SSA from Plaintiff’s benefits.

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Counsel is further ORDERED to reimburse Plaintiff for the $12,000 in fees previously paid by

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the Government under the EAJA.

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This order disposes of Docket No. 32.

United States District Court
Northern District of California

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IT IS SO ORDERED.

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Dated: January 9, 2019

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______________________________________
EDWARD M. CHEN
United States District Judge

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