Pauer v. Colvin

Filing 28

ORDER GRANTING 24 MOTION OF PLAINTIFFS' COUNSEL FOR ATTORNEYS' FEES UNDER 42 U.S.C. § 406(b); AND VACATING HEARING. Signed by Judge Beth Labson Freeman on 7/16/2018. (blflc1S, COURT STAFF) (Filed on 7/16/2018)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SAN JOSE DIVISION

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LAURIE T. PAUER,
Plaintiff,

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v.

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United States District Court
Northern District of California

Case No. 15-cv-05081-BLF

NANCY A. BERRYHILL, Acting
Commissioner of Social Security,

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Defendant.
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ORDER GRANTING MOTION OF
PLAINTIFFS’ COUNSEL FOR
ATTORNEYS’ FEES UNDER
42 U.S.C. § 406(b); AND VACATING
HEARING
[Re: ECF 24]

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In this Social Security appeal, the Court approved the parties’ stipulation to reverse and

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remand the adverse benefits decision pursuant to 42 U.S.C. § 405(g), sentence four, so that the

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Commissioner could conduct further administrative proceedings. Order Approving Stipulation to

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Reversal and Remand, ECF 18. The Court entered judgment for Plaintiff based on the stipulated

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remand. Judgment, ECF 19. On remand, Plaintiff was awarded past-due benefits in the amount of

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$62,428.1 See Notice of Award, ECF 24-2. Plaintiff’s counsel (“Counsel”), who represented her

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in both the administrative and judicial proceedings, has filed an application for an award of

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attorneys’ fees in an amount totaling 25% of the past-due benefits. See Applic., ECF 24. The

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application is made pursuant to 42 U.S.C. § 406(b) and the parties’ contingent-fee agreement.

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The Social Security Administration withheld $60,156 of Plaintiff’s past-due benefits to ensure
there were sufficient funds available to pay any attorneys’ fees award, and it issued a check in the
amount of $2,272 for the remainder of the past-due benefits, for a total of $62,428 ($60,156 +
$2,272). See Notice of Award, ECF 24-2. Counsel’s application for attorneys’ fees transposes the
last two digits, stating that Plaintiff was awarded past-due benefits in the amount of $62,482. See
Applic. at 2, ECF 24. The Government omits the $2,272 check from the calculation, stating that
Plaintiff was awarded past-due benefits in the amount of $60,156. See Response at 2, ECF 26.
Those clerical errors do not affect the Court’s substantive analysis.

Having reviewed Counsel’s motion, the Government’s response, and Counsel’s reply, the

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Court concludes that the motion is appropriate for disposition without oral argument and

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VACATES the hearing set for October 11, 2018. See Civ. L.R. 7-1(b). The Court finds that the

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fees sought are reasonable, and therefore GRANTS the motion in the amount of $15,607, which is

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25% of the past-due benefits award of $62,428.2
I.

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LEGAL STANDARD
Section 406(b) of the Social Security Act governs Counsel’s request for fees. Under that

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provision, “[w]henever a court renders a judgment favorable to a claimant under this subchapter

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who was represented before the court by an attorney, the court may determine and allow as part of

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its judgment a reasonable fee for such representation, not in excess of 25 percent of the total of the

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United States District Court
Northern District of California

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past-due benefits to which the claimant is entitled by reason of such judgment.” 42 U.S.C. §

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406(b)(1)(A). “A court may award such a fee even if the court’s judgment did not immediately

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result in an award of past-due benefits; where the court has rendered a judgment favorable to a

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claimant by reversing an earlier determination by an ALJ and remanding for further consideration,

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the court may calculate the 25% fee based upon any past-due benefits awarded on remand.”

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Butler v. Colvin, No. 3:14-CV-02050-LB, 2017 WL 446290, at *1 (N.D. Cal. Feb. 2, 2017).

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“[T]he fee is paid by the claimant out of the past-due benefits awarded; the losing party is not

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responsible for payment.” Crawford v. Astrue, 586 F.3d 1142, 1147 (9th Cir. 2009).

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Attorneys specializing in social security work “routinely enter into contingent-fee

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agreements specifying that the fee will be 25% of any past-due benefits recovered, thus providing

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the attorney the statutory maximum of fees if the representation is successful.” Id. The Supreme

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Court has held that Ҥ 406(b) does not displace contingent-fee agreements as the primary means

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by which fees are set for successfully representing Social Security benefits claimants in court.”

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Gisbrecht v. Barnhart, 535 U.S. 789, 807 (2002). However, the district court must review

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contingent-fee agreements “as an independent check, to assure that they yield reasonable results in

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particular cases.” Id. “[T]he district court must first look to the fee agreement and then adjust

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Counsel requests fees in the amount of $15,620.50 based on his calculation of 25% of $62,482
rather than 25% of $62,428.
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downward if the attorney provided substandard representation or delayed the case, or if the

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requested fee would result in a windfall.” Crawford, 586 F.3d at 1151.
Where attorneys’ fees have been awarded pursuant to the Equal Access to Justice Act

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(“EAJA”), the EAJA fees must be offset against any fees awarded under § 406(b). Gisbrecht, 535

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U.S. at 796 (citing 28 U.S.C. § 2412). “Under EAJA, a party prevailing against the United States

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in court, including a successful Social Security benefits claimant, may be awarded fees payable by

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the United States if the Government’s position in the litigation was not ‘substantially justified.’”

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Id. (quoting 28 U.S.C. § 2412). “Congress harmonized fees payable by the Government under

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EAJA with fees payable under § 406(b) out of the claimant’s past-due Social Security benefits in

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this manner: Fee awards may be made under both prescriptions, but the claimant’s attorney must

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United States District Court
Northern District of California

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refund to the claimant the amount of the smaller fee.” Id. (internal quotation marks, citation, and

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alterations omitted). “Thus, an EAJA award offsets an award under Section 406(b), so that the

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amount of the total past-due benefits the claimant actually receives will be increased by the EAJA

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award up to the point the claimant receives 100 percent of the past-due benefits.” Id. (internal

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quotation marks, citation, and alterations omitted).

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II.

DISCUSSION
Pursuant to the standards set forth above, the Court begins its analysis by looking to the

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contingent fee agreement between Counsel and Plaintiff. Agreement, ECF 24-3. The agreement

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provides that, subject to approval of the district or circuit court, Plaintiff will pay Counsel “a fee

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no greater than 25% of the past-due benefits” recovered. Id. at 1. Accordingly, the agreement is

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within the 25% cap set forth in § 406(b). Nothing in the record suggests that Counsel’s

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performance was substandard or that Counsel delayed proceedings in an effort to increase the

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amount of fees awarded. Counsel obtained an excellent result for Plaintiff, comprising a

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substantial award of past-due benefits and ongoing benefits. See Notice of Award, ECF 24-2. The

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fee award in question, $15,607, is consistent with other fee awards in similar cases in this district.

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See, e.g., Eckert v. Berryhill, No. 15-CV-04461-JCS, 2017 WL 3977379, at *3 (N.D. Cal. Sept.

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11, 2017) (awarding $16,566.25 in fees following an award of $66,265 in past-due benefits);

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Devigili v. Berryhill, No. 15-CV-02237-SI, 2017 WL 2462194, at *2 (N.D. Cal. June 7, 2017)
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(awarding $15,278.00 in fees following an award of $76,391.00 in past-due benefits).

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The Government’s response to the motion states that the Commissioner takes no position

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on Counsel’s request for fees, and that the Commissioner submits a response pursuant to her role

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“resembling that of a trustee” for Plaintiff. Gov’t’s Response at 2, ECF 26. The Government

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notes that based on Counsel’s representation that he spent 25.5 hours on the case, a fee award in

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the amount requested would result in an effective hourly rate of approximately $612. The

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Government cites Hearn v. Barnhart, 262 F. Supp. 2d 1033, 1036-37 (N.D. Cal. 2003) for the

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proposition that appropriate effective hourly rates for social security cases range from $187.55 to

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$694.44. In reply, Counsel notes that Hearn is fifteen years old and cites many more recent cases
awarding attorneys’ fees under § 406(b) with effective hourly rates ranging between $1,000 and

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United States District Court
Northern District of California

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$1,500.
Having considered the record in this case and the applicable law, the Court is satisfied that

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Counsel’s request for attorneys’ fees under § 406(b) is reasonable. Counsel will be required to

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reimburse Plaintiff in the amount of $5,600, the amount of attorneys’ fees previously awarded to

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Plaintiff in this case under EAJA.

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III.

ORDER
(1)

$15,607; and

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Counsel’s motion for attorneys’ fees under § 406(b) is GRANTED in the amount of

(2)

Counsel shall reimburse Plaintiff in the amount of $5,600, which previously was
paid by the Government under EAJA.

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Dated: July 16, 2018
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BETH LABSON FREEMAN
United States District Judge

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