Damien M Ainsworth v. Carolyn W. Colvin

Filing 35

ORDER GRANTING 32 MOTION FOR ATTORNEY'S FEES UNDER 42 U.S.C. § 406(B). Signed by Judge Beth Labson Freeman on 10/20/20.(blflc2S, COURT STAFF) (Filed on 10/20/2020)

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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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DAMIEN M. AINSWORTH,
Plaintiff,

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United States District Court
Northern District of California

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Case No. 16-cv-03933-BLF

v.
NANCY A. BERRYHILL,
Defendant.

ORDER GRANTING MOTION FOR
ATTORNEY'S FEES UNDER 42 U.S.C.
§ 406(B)
[Re: ECF 31]

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In this Social Security appeal, the Court granted in part Plaintiff Damien M. Ainsworth’s

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(“Ainsworth”) motion for summary judgment, remanded the case for further agency proceedings,

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and entered judgment for Plaintiff. See Order, ECF 27; J., ECF 28. Based on the stipulation of

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Ainsworth and the Social Security Commissioner, the Court granted $4,555.05 in attorney fees to

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Ainsworth under the Equal Access to Justice Act (EAJA), 28 U.S.C. § 2412(d). Joint Stipulation

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& Order, ECF 30. On remand, Ainsworth was awarded past-due Disability Insurance Benefits in

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the amount of $96,634.60. See Mem. of P. & A. 1–2 (“Mem.”), ECF 31-1. An additional

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$31,679.00 was withheld toward payment of attorney’s fees. See id. at 2.

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Ainsworth’s counsel (“Counsel”) has filed an application for an award of attorneys’ fees

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pursuant to 42 U.S.C. § 406(b) and the parties’ contingent-fee agreement, which provides that

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Ainsworth will pay attorneys’ fees in the maximum amount of 25% of past-due benefits awarded.

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See id. Counsel specifically seeks a “gross fee” of $29,555.05, which would equate to a “net fee”

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of $25,000.00 after he reimburses Ainsworth $4,555.05 for EAJA fees. Id.

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The Court finds that the fees sought are reasonable and GRANTS the motion for attorneys’
fees in the amount of $29,555.05.

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I.

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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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.” Butler

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United States District Court
Northern District of California

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v. Colvin, No. 3:14-CV-02050-LB, 2017 WL 446290, at *1 (N.D. Cal. Feb. 2, 2017). “[T]he fee is

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paid by the claimant out of the past-due benefits awarded; the losing party is not responsible for

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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.” Crawford, 586

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F.3d at 1147. The Supreme Court has held that Ҥ 406(b) does not displace contingent-fee

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agreements as the primary means by which fees are set for successfully representing Social

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Security benefits claimants in court.” Gisbrecht v. Barnhart, 535 U.S. 789, 807 (2002). However,

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the district court must review contingent-fee agreements “as an independent check, to assure that

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they yield reasonable results in particular cases.” Id. “[T]he district court must first look to the fee

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agreement and then adjust downward if the attorney provided substandard representation or

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delayed the case, or if the 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).

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II.

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

contingent fee agreement between Counsel and Ainsworth. See Att’ys Fees Contract, ECF 31-4.
The agreement provides that, subject to approval of the federal court, Ainsworth will pay “a fee no

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United States District Court
Northern District of California

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greater than 25% of the past-due benefits owed to [Ainsworth] (and [his] auxiliary beneficiaries, if

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applicable.)” Id. at 1. Ainsworth’s award letter explicitly states his past-due Disability Insurance

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Benefits in the amount of $96,634.60 are to be paid directly to him and $31,679.00 are to be

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withheld toward the payment of attorney’s fees. See SSA Benefits Letter 2–3, ECF 31-3. This

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means the total of Ainsworth’s past-due Disability Insurance Benefits is $128,313.60. See id. A

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fee equaling 25% of the total Disability Insurance Benefits ($128,313.60) is $32,078.40. Counsel

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requested $29,555.05, which equates to a 23.03% attorney fee. See Mem. 2. Nothing in the record

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suggests that Counsel’s performance was substandard or that Counsel delayed proceedings in an

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effort to increase the amount of fees awarded. Counsel obtained an excellent result for Plaintiff.

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See id. at 3–12.

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The Government’s response to the motion states that the Social Security Commissioner

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takes no position on Counsel’s request for fees, and that the Commissioner submits a response

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pursuant to his role “resembling that of a trustee” for Ainsworth. Resp. 2, ECF 34 (quoting

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Gisbrecht, 535 U.S. at 798 n.6). The Government notes that based on Counsel’s representation

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that he spent 22.3 hours on the district court proceedings, the amount requested would result in an

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effective hourly rate of $1,325.34. Resp. 3 n.2; see Itemization, ECF 31-5. The Government then

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cites Hearn v. Barnhart, 262 F. Supp. 2d 1033, 1036–37 (N.D. Cal. 2003), a case in which the

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district court noted that appropriate effective hourly rates for social security cases have ranged
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from $187.55 to $694.44. Id.; Resp. 3 n.2. The Government also cites to Harrell v. Berryhill, No.

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16-cv-02428-MEJ, 2018 WL 4075883, at *4 (N.D. Cal. Aug. 27, 2018), a case where the Court

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reduced the counsel’s fees request of $1,213.83 per hour to $600.00 per hour. Id. The Government

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flags that Counsel should not be awarded a windfall. Resp. 4. Finally, the Government notes that

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because the Court previously approved an award of EAJA fees in the amount of $4,555.05, these

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fees must be reimbursed to Ainsworth if the current fee motion is granted. Resp. 4–5. Counsel

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acknowledges that the EAJA fees must be refunded to Ainsworth if the current motion is granted.

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Mem. 2, 13.

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The Court finds the hourly rate of $1,325.34 reasonable under the circumstances. See Villa
v. Astrue, No. CIV–S–06–0846 GGH, 2010 WL 118454, at *1–2 (E.D. Cal. Jan. 7, 2010)

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United States District Court
Northern District of California

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(approving § 406(b) fee request exceeding $1000 an hour and noting that “[r]educing § 406(b)

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fees after Crawford is a dicey business”); see also Williams v. Berryhill, No. EDCV 15-919-KK,

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2018 WL 6333695, at *2 (C.D. Cal. Nov. 13, 2018) (awarding fee request that provides an hourly

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rate of $1,553.36 per hour); Coles v. Berryhill, No. EDCV 14-1488-KK, 2018 WL 3104502, at *3

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(C.D. Cal. June 21, 2018) (effective hourly rate of $1,431.94 reasonable under the

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circumstances); Palos v. Colvin, No. CV 15-04261-DTB, 2016 WL 5110243, at *2 (C.D. Cal.

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Sept. 20, 2016) (fees sought translate to $1,546.39 per hour for attorney and paralegal services).

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The Court notes that Hearn is now almost two decades old; accordingly, the fees discussed there

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do not necessarily provide helpful guidance today. Meanwhile, the judgment in Harrell was later

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amended to increase the awarded fees back to the requested amount of $1,213.83. See Harrell v.

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Berryhill, No. 16-CV-02428-TSH, 2018 WL 4616735, at *4 (N.D. Cal. Sept. 24, 2018) (“The

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Court finds that a de facto hourly rate of $1,213.83 is reasonable.”).

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Here, Counsel assumed a substantial risk of not recovering attorneys’ fees because the

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claims had been denied after exhausting administrative remedies. See, e.g., Sample v. Astrue, No.

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C-07-04814 JSW EDL, 2010 WL 4688987, at *1 (N.D. Cal. July 21, 2010), report and

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recommendation adopted, No. C 07-04814 JSW, 2010 WL 4688985 (N.D. Cal. Nov. 9, 2010); see

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also Mem. 4–6. Counsel also completed a substantial amount of work for Ainsworth, including

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representing Ainsworth at both the administrative and judicial levels of adjudication. Mem. 2, 5.
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After review of the record, the Court finds that the requested attorneys’ fees are reasonable and do

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not constitute a windfall. See Astrue, 2010 WL 4688987, at *1 (granting the requested attorneys’

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fees in a case involving a similar risk and degree of representation by counsel).
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 in the amount of $29,555.05 under § 406(b) is reasonable.

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Plaintiff will be refunded the $4,555.05 in EAJA fees previously awarded and currently held in

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trust.

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III.

ORDER

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

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United States District Court
Northern District of California

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$29,555.05; and

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(2) Ainsworth SHALL be refunded the $4,555.05 in EAJA fees previously awarded.

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Dated: October 20, 2020
______________________________________
BETH LABSON FREEMAN
United States District Judge

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