McCullough v. Colvin

Filing 31

ORDER GRANTING 25 MOTION OF PLAINTIFF'S COUNSEL FOR ATTORNEYS' FEES UNDER42 U.S.C. § 406(b). Signed by Judge Beth Labson Freeman on 11/15/2018.(blflc2S, COURT STAFF) (Filed on 11/15/2018)

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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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KRISTIN L. MCCULLOUGH,
Plaintiff,

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v.

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NANCY A. BERRYHILL,
Defendant.

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United States District Court
Northern District of California

Case No. 16-cv-00625-BLF
ORDER GRANTING MOTION OF
PLAINTIFF’S COUNSEL FOR
ATTORNEYS’ FEES UNDER
42 U.S.C. § 406(b)
[Re: ECF 25]

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In this Social Security appeal, the Court granted in part Plaintiff Kristin McCullough’s

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(“Plaintiff”) motion for summary judgment and remanded the case for a determination of

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disability for the period from June 30, 2010 through December 3, 2012. See Summary Judgment

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Order (“Order”) at 1, ECF 21. The Court then entered judgment based on that order. Judgment,

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ECF 22. On remand, Plaintiff was awarded past-due benefits in the amount of $186,637.00.1 See

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Appl., Ex. B (“Award Notice”), ECF 25-2. 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 totaling $36,659.25, or 19.6% of the past due benefits. See Mot., ECF 25. 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 Government did not oppose the motion. Having reviewed Counsel’s motion, the Court finds

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that the fees sought are reasonable, and therefore GRANTS the motion in the amount of

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$36,659.25, which is 19.6% of the past-due benefits award of $186,637.00.

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The Social Security Administration withheld $46,659.25 of Plaintiff’s past-due benefits to ensure
there were sufficient funds available to pay any attorneys’ fees award. The Award Notice makes
clear that this amount is 25% of the past due benefits. See Award Notice.
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I.

LEGAL STANDARD

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

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United States District Court
Northern District of California

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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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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.

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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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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

United States District Court
Northern District of California

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contingent fee agreement between Counsel and Plaintiff. Suppl. Agreement, ECF 29-1. The

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agreement provides that, subject to approval of the district or circuit court, Plaintiff will pay

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Counsel “a fee no greater than 25% of the past-due benefits” recovered. Id. at 1. Accordingly, the

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agreement is within the 25% cap set forth in § 406(b), and the requested fees likewise comply, as

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they total only 19.6% of the total award. 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, consisting of a

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substantial award of past-due benefits and ongoing benefits. See Award Notice. The fee award of

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$36,659.25 for 34.25 hours of work translates to an hourly rate of $1,070.34, or an effective

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hourly rate of $874.72 after the EAJA fees are offset. See ECF 24 (awarding $6,700 in EAJA

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fees). Many courts in this circuit award attorneys’ fees under § 406(b) with effective hourly rates

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ranging between $1,000 and $1,500. See, e.g., Lopez v. Colvin, Case No. 6:14-cv-1910-SI, 2017

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WL 168060, at *2 n.2 (N.D. Cal. Jan. 17, 2017) (effective hourly rate $1,131); Palos v. Colvin,

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No. CV 15-04261-DTB, 2016 WL 5110243, at *2 (C.D. Cal. Sept. 20, 2016) (effective hourly rate

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$1,546.39). This award is likewise reasonable given the contingent nature of the fee.

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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 $6,700, the amount of attorneys’ fees previously awarded to
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Plaintiff in this case under EAJA.
III.

ORDER
(1)

$36,659.25; 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 $6,700, which previously was
paid by the Government under EAJA.

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IT IS SO ORDERED.

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United States District Court
Northern District of California

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Dated: November 15, 2018
______________________________________
BETH LABSON FREEMAN
United States District Judge

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