Paredes Martinez v. Astrue

Filing 31

ORDER Granting Plaintiff's Counsel's 28 Motion for Attorney Fees Pursuant to 42 U.S.C. § 406(b). Signed by Judge Janis L. Sammartino on 10/19/2017. (mpl)

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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 GILBERTO PAREDES MARTINEZ, Case No.: 13-CV-272 JLS (JLB) Plaintiff, 12 13 14 ORDER GRANTING PLAINTIFF’S COUNSEL’S MOTION FOR ATTORNEY FEES PURSUANT TO 42 U.S.C. § 406(b) v. NANCY A. BERRYHILL, Acting Commissioner of Social Security, 15 16 Defendant. (ECF No. 28) 17 Presently before the Court is Plaintiff Gilberto Paredes Martinez’s Counsel Brian C. 18 Shapiro’s (“Counsel”) Motion for Attorney Fees Pursuant to 42 U.S.C. § 406(b). (“Pl.’s 19 Mot. for Att’y Fees,” ECF No. 28.) Also before the Court is Defendant’s Statement of 20 Non-Opposition to Plaintiff’s Motion for Attorney’s Fees. (ECF No. 29.) Plaintiff has not 21 filed a response. Having considered the parties’ arguments and the law, the Court 22 GRANTS Counsel’s Motion for Fees. 23 BACKGROUND 24 On February 4, 2013, Plaintiff filed a complaint pursuant to Section 405(g) of the 25 Social Security Act. (Report & Recommendation (“R. & R.”) at 2, ECF No. 21.) Plaintiff 26 asked the Court to review the final decision of the Commissioner of the Social Security 27 Administration denying Plaintiff’s claim for social security disability insurance (“SSDI”) 28 benefits. Id. at 3. Counsel filed the complaint on Plaintiff’s behalf pursuant to a signed 1 13-CV-272 JLS (JLB) 1 contingency-fee agreement providing that Counsel, if successful, would receive 25% of the 2 final back pay award. (Pl.’s Mot. for Att’y Fees, Shapiro Decl. ¶ 2; id., Ex. 1, at 1.) On 3 September 10, 2013, Plaintiff filed a Motion for Summary Judgment regarding his Section 4 405(g) claim and on October 1, 2013, Defendant filed a Cross Motion for Summary 5 Judgment and Opposition to Plaintiff’s Motion for Summary Judgment. (R. & R. at 3.) 6 On November 2, 2013, Plaintiff filed a Reply and an Opposition to Defendant’s Cross 7 Motion. (Id.) 8 On August 7, 2014, Magistrate Judge Jill L. Burkhardt issued a Report & 9 Recommendation finding that the Administrative Law Judge (“ALJ”) committed legal 10 error by failing to provide clear and convincing reasons for discrediting Plaintiff’s 11 testimony about his pain and limitation symptoms. (Id. at 11.) Magistrate Judge Burkhardt 12 recommended that Defendant’s Motion for Summary Judgment be denied, Plaintiff’s 13 Motion for Summary Judgment be granted in part and denied in part, and the case to be 14 remanded for further proceedings. (Id. at 13.) Defendant objected to the R. & R., but on 15 September 4, 2014, the Court adopted Magistrate Judge Burkhardt’s R. & R. in its entirety. 16 (ECF No. 24.) 17 Prior to remand, the parties jointly moved for attorney’s fees pursuant to the Equal 18 Access to Justice Act (“EAJA”), 28 U.S.C. § 2412(d), in the amount of $4,900, “subject to 19 any offset allowed under the United States Department of Treasury’s Offset Program.” 20 (ECF No. 25.) The Court granted the Motion. (ECF No. 27.) 21 On remand, ALJ Robert Iafe issued a decision fully favorable to Plaintiff. (Pl.’s 22 Mot. for Att’y Fees, Ex. 2, at 1) On August 27, 2017, the Social Security Administration 23 (“SSA”) issued a Notice of Award letter to Mr. Paredes Martinez, noting that $42,818 of 24 the award had been set aside for potential payment to Mr. Paredes Martinez’s 25 representative as attorney’s fees, which constituted 25% of Plaintiff’s past-due benefits. 26 (Id. at 4.) Counsel now moves, under 42 U.S.C. § 406(b), for attorney’s fees in the amount 27 of $25,000 with a credit to Plaintiff for EAJA fees previously paid in the amount of $4,900. 28 (Pl.’s Mot. for Att’y Fees 1.) 2 13-CV-272 JLS (JLB) 1 LEGAL STANDARD Section 406(b) governs an attorney’s right to recover fees in a successful Social 2 3 Security case.1 The U.S. Supreme Court has held that, 4 11 [m]ost plausibly read, . . . § 406(b) does not displace contingentfee agreements as the primary means by which fees are set for successfully representing Social Security benefits claimants in court. Rather, § 406(b) calls for court review of such arrangements as an independent check, to assure that they yield reasonable results in particular cases. Congress has provided one boundary line: Agreements are unenforceable to the extent that they provide for fees exceeding 25 percent of the past due benefits. Within the 25 percent boundary, . . . the attorney for the successful claimant must show that the fee sought is reasonable for the services rendered. 12 Gisbrecht v. Barnhart, 535 U.S. 789, 807 (2002) (footnotes and citations omitted). Thus, 13 a district court should first look to the contingency-fee agreement and then test it for 14 reasonableness. Id. at 808. 5 6 7 8 9 10 15 The Supreme Court has instructed that a reduction of the fee award may be 16 appropriate “based on the character of the representation and the results the representative 17 achieved.” 18 reasonableness of a fee award a Court “may properly reduce the fee for substandard 19 performance, delay, or benefits that are not in proportion to the time spent on the case.” Id. The Ninth Circuit subsequently explained that when analyzing the 20 21 22 23 24 25 26 27 28 1 Section 406(b)(1)(A) of title 42 of the United States Code provides: Whenever a court renders a judgment favorable to a claimant under this subchapter who was represented before the court by an attorney, the court may determine and allow as part of its judgment a reasonable fee for such representation, not in excess of 25 percent of the total past-due benefits to which the claimant is entitled by reason of such judgment, and the Commissioner of Social Security may, notwithstanding the provisions of section 405(i) of this title, but subject to subsection (d) of this section, certify the amount of such fee for payment to such attorney out of, and not in addition to, the amount of such past-due benefits. In case of any such judgment, no other fee may be payable or certified for payment for such representation except as provided in this paragraph. 3 13-CV-272 JLS (JLB) 1 Crawford v. Astrue, 586 F.3d 1142, 1151 (9th Cir. 2009) (en banc) (citing Gisbrecht, 535 2 U.S. at 808). Further, the Supreme Court has explicitly provided that, 3 [i]n this regard, the court may require the claimant’s attorney to submit, not as a basis for satellite litigation, but as an aid to the court’s assessment of the reasonableness of the fee yielded by the fee agreement, a record of the hours spent representing the claimant and a statement of the lawyer’s normal hourly billing charge for noncontingent-fee cases. 4 5 6 7 8 Gisbrecht, 535 U.S. at 808; see also Crawford, 586 F.3d at 1151. A district court may 9 consider the lodestar calculation, but only as an aid in assessing the reasonableness of the 10 fee. Crawford, 586 F.3d at 1151. It is important that the Court assess the reasonableness 11 of the requested fees because, “while the attorney’s compensation must be sufficient to 12 encourage members of the bar to undertake representation of disability claimants, the 13 disability award, from which the attorney’s fee is paid, is normally an already-inadequate 14 stipend for the support and maintenance of the claimant and his dependents.” Starr v. 15 Bowen, 831 F.2d 872, 873 (9th Cir. 1987) (quoting MacDonald v. Weinberger, 512 F.2d 16 144, 146–47 (9th Cir. 1975)). 17 The EAJA also permits an attorney to receive fees for successful Social Security 18 representations.2 See Parrish v. Comm’r of Soc. Sec. Admin., 698 F.3d 1215, 1216–17 (9th 19 Cir. 2012). Fees awarded pursuant to the EAJA are paid by the government rather than the 20 claimant. Id. at 1218. Accordingly, while “[f]ee awards may be made under both 21 prescriptions, . . . the claimant’s attorney must ‘refun[d] to the claimant the amount of the 22 23 24 25 26 27 28 2 Pursuant to the EAJA: [A] court shall award to a prevailing party other than the United States fees and other expenses . . . incurred by that party in any civil action (other than cases sounding in tort), including proceedings for judicial review of agency action, brought by or against the United States in any court having jurisdiction of that action, unless the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust. 28 U.S.C. § 2412(d)(1)(A). 4 13-CV-272 JLS (JLB) 1 smaller fee.’” Gisbrecht, 535 U.S. at 796 (second alteration in original) (quoting Act of 2 Aug. 5, 1985, Pub. L. No. 99-80, § 3, 99 Stat. 186). 3 ANALYSIS 4 The Court begins its analysis of the § 406(b) award at issue by examining the 5 contingency-fee agreement. Counsel’s requested § 406(b) award is less than the original 6 25% contingency-fee agreement between the parties. Plaintiff was awarded $171,272 in 7 past-due benefits by SSA. (Pl.’s Mot. for Att’y Fees 2.) The SSA withheld 25% of 8 Plaintiff’s past-due benefits—$42,818—and Counsel requests only $25,000 of the 9 withholding. At a minimum, the requested award is well within the 25% statutory 10 boundary. 42 U.S.C. § 406(b)(1)(A); Gisbrecht, 535 U.S. at 807. Further, the Court 11 concludes that none of the reasons for reducing a fee award identified by the Crawford 12 court are applicable in the present case. Counsel obtained a favorable judgment for 13 Plaintiff and the record presents no indication of delay. The only remaining consideration 14 is whether the benefits secured by Counsel are in proportion to the time spent on the case. 15 “Since Gisbrecht was handed down by the Supreme Court, the district courts 16 generally have been deferential to the terms of contingency fee contracts in § 406(b) cases, 17 accepting that the resulting de facto hourly rates may exceed those for non contingency- 18 fee arrangements.” Hearn v. Barnhart, 262 F. Supp. 2d 1033, 1037 (N.D. Cal. 2003) 19 (collecting cases). Further, contingency-fee arrangements expose an attorney to the 20 inherent “risk of receiving nothing for his time and effort” if the plaintiff is unsuccessful. 21 Id. 22 In the present case, Counsel spent 28.2 hours3 litigating the district court appeal, 23 (Pl.’s Mot. for Att’y Fees, Shapiro Decl. ¶ 5); assessed against the proposed fee award, this 24 amounts to a de facto hourly rate of $886.52 per hour ($25,000 / 28.2 hours) for both 25 attorney and paralegal work. While such an hourly rate is on the higher end charged for 26 27 28 3.7 hours were billed by Counsel’s paralegal and 24.5 hours were billed by Counsel. (Pl.’s Mot. for Att’y Fees, Ex. 4, at 1–2.) 3 5 13-CV-272 JLS (JLB) 1 social security appeals, the Court nonetheless concludes that the fee is reasonable in the 2 present case. Counsel had sixteen years of experience in the field of social security law at 3 the time Plaintiff filed his Complaint. (Id. ¶ 7.) Counsel secured a favorable outcome in 4 Plaintiff’s district court appeal, ultimately resulting in a fully favorable judgment by the 5 SSA ALJ. 6 Further, fees within this general range have been previously awarded and upheld by 7 the Ninth Circuit. See, e.g., Crawford, 586 F.3d at 1153 (Clifton, J., concurring in part and 8 dissenting in part) (noting that majority ordered payments in underlying cases that equated 9 to $519, $875, and $902 hourly rates). Indeed, Counsel was a party-in-interest to the 10 Crawford decision and his requested award was one of those upheld by the Ninth Circuit. 11 Id. at 1145 (majority opinion). Next, the benefits are in proportion to the time spent on the 12 case. While every case is different, the amount of time spent on this case (24.5 hours by 13 Counsel and 3.7 hours by Counsel’s Paralegal) are similar to the underlying cases approved 14 in Crawford.4 See id. Counsel’s requested attorney’s fee is 14.5% of benefits awarded 15 ($25,000 requested attorney’s fee / $171,272 back pay awarded). This fee percentage is 16 within the range approved in Crawford, see id., as well as less than fee percentages 17 previously approved by this Court, see Macewen v. Colvin, No. 10-CV-1263-JLS (MDD), 18 2016 WL 6082308, at *1 (S.D. Cal. Oct. 18, 2016) (approving 25% fee award), and other 19 courts in this District. See, e.g., Richardson v. Colvin, No. 15-CV-1456-MMA-BLM, 2017 20 WL 1683062, at *2 (S.D. Cal. May 2, 2017) (approving 25% attorney’s fee). 21 Finally, Counsel took a non-negligible risk in accepting the present case. Plaintiff 22 had previously been denied benefits. (R. & R. 1.) There were cross-motions for summary 23 judgment during the district court appeal, resulting in a fourteen-page Report and 24 Recommendation by Magistrate Judge Burkhardt, (ECF No. 21), and, upon remand, further 25 argument before ALJ Iafe. (See Pl.’s Mot. for Att’y Fees, Ex. 3). In sum, this was not a 26 27 28 4 The time spent in the three underlying cases was: 19.5 hours by counsel and 4.5 hours by paralegal in Crawford; 17.45 hours by counsel and 4.7 hours by paralegal in Washington; and 26.9 hours by counsel and 2.6 hours by paralegal in Trejo. Crawford, 586 F.3d at 1145. 6 13-CV-272 JLS (JLB) 1 formulaic case and Counsel’s representation was adequate under the circumstances. 2 Finally, Counsel requests the Court to order Counsel to reimburse Plaintiff the 3 amount of $4,900 previously paid by the SSA under EAJA. This satisfies the requirement 4 that counsel refunds its plaintiff an EAJA award that is smaller than the related § 406(b) 5 award. See Gisbrecht, 535 U.S. at 796. Counsel’s request meets this requirement. 6 Accordingly, the Court concludes that the EAJA award will be deducted from the § 406(b) 7 award. 8 CONCLUSION 9 In light of the foregoing, the Court concludes that Counsel’s fee request is reasonable 10 and therefore GRANTS Counsel’s Motion for Attorney Fees. The Court awards fees in 11 the amount of $25,000. Counsel SHALL reimburse Mr. Gilberto Paredes Martinez the 12 amount of $4,900 in EAJA fees previously paid by the Government. 13 14 IT IS SO ORDERED. Dated: October 19, 2017 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7 13-CV-272 JLS (JLB)

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