Magallanes v. Social Security Administration, Commissioner of

Filing 30

MEMORANDUM AND ORDER granting 27 Motion for Attorney Fees. It is therefore ordered pursuant to 42 U.S.C. 406(b) the court approves an attorney fee of $67,138.00 which the Commissioner shall provide to Plaintiff's counsel subject to any remaining past due benefits withheld. Counsel shall refund the EAJA fee award of $18,750.40 to Plaintiff. Signed by District Judge John W. Lungstrum on 11/26/2024. (kmc)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS

PAMELA S. MAGALLANES,

)
)
Plaintiff,
)
)
v.
)
)
)
MARTIN J. O’MALLEY,1
)
Commissioner of Social Security,
)
)
Defendant.
)
_______________________________________ )

CIVIL ACTION
No. 23-2437-JWL

MEMORANDUM AND ORDER

This matter is before the court on a motion for approval of an attorney fee (Doc.
27 (Pl. Mot.) pursuant to the Social Security Act, 42 U.S.C. ' 406(b).

Plaintiff=s motion

is GRANTED, approving a fee in the amount of $67,138.00 pursuant to the Social
Security Act.
I.

Background
Plaintiff filed a Complaint in this court on September 26, 2023, seeking judicial

review of a decision of the Commissioner of the Social Security Administration.

(Doc

On December 20, 2023, Mr. O’Malley was sworn in as Commissioner of Social
Security. In accordance with Rule 25(d)(1) of the Federal Rules of Civil Procedure, Mr.
O’Malley is substituted for Acting Commissioner Kilolo Kijakazi as the defendant.
Pursuant to the last sentence of 42 U.S.C. § 405(g), no further action is necessary.
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1).

After the Commissioner answered and filed the administrative record in this case,

Plaintiff filed two motions for 30-day extensions of time which were granted and
eventually filed her Social Security Brief on February 15, 2024.

(Doc. 10).

The

Commissioner also sought and was granted two 30-day extensions of time, confessed
error, and the parties filed a joint motion seeking reversal of the Commissioner’s decision
and a finding that Plaintiff was disabled effective January 1, 2009, with remand of the
case to the Commissioner for calculation and award of benefits. (Doc. 16). The court
granted the parties’ joint motion and entered judgment remanding the case for calculation
and award of benefits. (Docs. 17, 18).

The court granted Plaintiff’s subsequent motion

for attorney fees pursuant to the Equal Access to Justice Act, in part, on July 29, 2024,
awarding $18,750.40 in fees.

(Doc. 26).

Notice of Award on September 28, 2024.

On remand, the Commissioner issued a
(Pl. Mot., Attach. 1).

The SSA withheld

$67,138.00 from Plaintiff’s past due benefits to pay a fee approved by the court.
Attach. 1, p.4.

Plaintiff now seeks award of attorney fees of the full 25% past due

benefits pursuant to ' 206(b) of the Social Security Act.
II.

Id.

42 U.S.C. § 406(b).

Legal Standard
The Social Security Act provides for the payment of an attorney fee out of the past

due benefits awarded to a beneficiary. 42 U.S.C. ' 406(b). The court has discretion to
approve such a fee. McGraw v. Barnhart, 450 F.3d 493, 497-98 (10th Cir. 2006).
However, the court has an affirmative duty to allow only so much of the fee as is

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reasonable. Gisbrecht v. Barnhart, 535 U.S. 789, 807-808 (2002); McGraw, 450 F.3d at
498; 42 U.S.C. ' 406(b)(1)(A).
(1)(A) 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 of the past-due
benefits to which the claimant is entitled by reason of such judgment, and
the Commissioner of Social Security may, . . . 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.
42 U.S.C. ' 406(b)(1)(A) (emphases added).
The Supreme Court, in Gisbrect determined that a contingency fee agreement
within the twenty-five percent ceiling is allowed by ' 406(b) of the Act, and that courts
may not use the “lodestar” method to establish a reasonable fee in such a case. Where
there is a contingency-fee agreement between a plaintiff and his attorney, the court is to
look first to the agreement and then test the agreement for reasonableness. Gisbrecht,
535 U.S. at 807-08. In determining reasonableness, the Court suggested that courts
should consider such factors as the character of representation, the results achieved,
whether the attorney is responsible for any delay, and whether the benefits are large in
comparison to the amount of time counsel spent on the case. Id. 535 U.S. at 808. The
Court noted that the comparison of benefits to time spent might be aided by submission
of the plaintiff=s attorney=s billing record and normal hourly billing rate. Id.
The Tenth Circuit has explained the procedure used in applying Gisbrecht.
Gordon v. Astrue, 361 F. App’x 933, 935–36 (10th Cir. 2010). It noted that the court is
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to look first to the fee agreement between the plaintiff and her counsel, and “the statute
does require courts to serve ‘as an independent check’ by ‘review[ing] for reasonableness
fees yielded by those agreements.’” Id. at 935 (quoting Gisbrecht, 535 U.S. at 807-09).
The court noted that the Court provided examples of proper reasons for reducing 406(b)
fee requests:
(1) when “the character of the representation and the results the
representative achieved” were substandard; (2) when “the attorney is
responsible for delay” that causes disability benefits to accrue “during the
pendency of the case in court”; and (3) when “the benefits are large in
comparison to the amount of time counsel spent on the case.”
Id. (quoting Gisbrecht, 535 U.S. at 808). The court acknowledged six factors recognized
by the Seventh Circuit before Gisbrecht was decided as potentially useful when making a
406(b) reasonableness determination—although it merely “assum[ed], without granting,
that the district court had some obligation to” consider those factors. Id. (citing McGuire
v. Sullivan, 873 F.2d 974, 983 (7th Cir. 1989) (“time and labor required; skill required;
contingency of fee; amount involved and result attained; experience, reputation, and
ability of attorney; and awards in similar cases.”). The Tenth Circuit reviews “a district
court’s award of attorney’s fees under § 406(b) for an abuse of discretion, see McGraw v.
Barnhart, 450 F.3d 493, 505 (10th Cir.2006), and will reverse only if the district court’s
decision is ‘based on a clearly erroneous finding of fact or an erroneous conclusion of
law or manifests a clear error of judgment,’” Id. at 935 (quoting United States v.
McComb, 519 F.3d 1049, 1054 (10th Cir. 2007)).

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This court recently approved 406(b) contingent attorney fees at an hourly rate of
$736.07 resulting in an equivalent hourly rate for non-contingent work of almost
$263.00; Madrigal v. Kijakazi, Civ. A. No. 19-2429-JWL, 2021 WL 4860555 (D. Kan.
October 19, 2021); see also, Gardipee v. Saul, Civ. A. No. 20-1001-JWL, 2021 WL
826206, *3 (D. Kan. Mar. 4, 2021) (an hourly rate of $1,001.90 resulting in an equivalent
hourly rate for non-contingent work of $357.82); Morris v. Kijakazi, Civ. A. No. 191133-JWL, 2021 WL 5769365 (D. Kan. Dec. 6, 2021) (hourly rate of $410.57); Rogers v.
Saul, Civ. A. No. 19-1134-JWL, 2022 WL 17718655 (D. Kan. Dec. 15, 2022) (hourly
rate of $2,265.39 and an equivalent hourly rate $809.07); Schlein v. Kijakazi, Civ. A. No.
21-1180-JWL, 2023 WL 5952025 (D. Kan. Sept. 13, 2023) (at an hourly rate of $703.80
resulting in an equivalent hourly rate of $251.36); Firment v. O’Malley, Civ. A. No. 221220-JWL, 2023 WL 8934765 (D. Kan. Dec. 27, 2023 (hourly rate of $1,157.81 and
equivalent hourly rate of $413.50); and, Walls v. O’Malley, Civ. A. No. 21-1011-JWL,
2024 WL 52609 (D. Kan. Jan. 3, 2024) (hourly rate of $1,407.34 and equivalent hourly
rate of $502.62).
III.

Discussion
Here, Plaintiff=s attorney requests a fee award of the full 25 percent of Plaintiff’s

past due benefits, or $67,138.00. She included a copy of the contingent fee agreement
signed by Plaintiff, in which she agreed to a fee of 25 percent of past due benefits. (Pl.
Mot., Attach. 2). Counsel submitted a listing of the hours expended in prosecuting this

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case before this court showing 200.3 hours expended.2 Id., Attach. 3. An award of 25
percent of past due benefits would result in an hourly rate of $839.23 and an effective
hourly rate in a noncontingent case of $299.72. Counsel argues that the skill,
competence, expertise, and experience of her and her firm produced an excellent result in
this case and support awarding the full 25% of past due benefits. Id., Attach. 1, pp.3-5.
The Commissioner submitted a response to Plaintiff’s Motion asserting that he
“neither supports nor opposes counsel’s request for attorney’s fees in the amount of
$67,138.00.” (Doc. 29, p.1).
The court has considered both the Gisbecht and the McGuire factors and the
arguments of counsel and makes the following findings. Plaintiff has met her burden to
prove that award of the full 25 percent of past due benefits is reasonable in the
circumstances present here. The court notes that counsel achieved an excellent result for
Plaintiff in this case especially considering the Commissioner chose to request remand
for an award of benefits without challenging Plaintiff’s brief. The court recognizes that
the contingent nature of the fee justifies a fee award in Social Security cases when the

The court notes counsel’s billing records show 291.8 hours expended in presenting this
case, but that counsel billed only 200.3 hours. (Pl. Mot., Attach. 3). Moreover, in
granting counsel’s request for fees under the Equal Access to Justice Act, the court found
counsel’s expending 200.3 hours in this case was grossly unreasonable but that she
reasonably expended 80 hours, far more than the mine run of Social Security disability
cases. (Doc. 26). The court concluded, “Considering all the facts and granting counsel
the benefit of the doubt, the court finds 80 hours of attorney time” is reasonable. Id. 14.
The court uses this number of hours in reviewing for reasonableness counsel’s fee request
here.
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claimant prevails which is higher than normal hourly rates charged by attorneys in other
matters in order to encourage practitioners to take such cases and to provide for those
cases taken which are not successfully concluded. This is particularly true due to the
deferential standard applicable in Social Security cases, Biestek v. Berryhill, 139 S. Ct.
1148, at 1154, 1157 (2019), and this court’s strict adherence to that standard.
Both the Commissioner and Plaintiff’s counsel remind the court that the Equal
Access to Justice Act (EAJA), 28 U.S.C. § 2412, fee in this case was $18,750.40 and
must be refunded to Plaintiff as the smaller fee.
The court finds that 25% of past due benefits, or $67,138.00, is a reasonable fee in
the circumstances of this case.
IT IS THEREFORE ORDERED that pursuant to 42 U.S.C. ' 406(b) the court
approves an attorney fee of $67,138.00 which the Commissioner shall provide to
Plaintiff=s counsel subject to any remaining past due benefits withheld.
IT IS FURTHER ORDERED that counsel shall refund the EAJA fee award of
$18,750.40 to Plaintiff.
Dated November 26, 2024, at Kansas City, Kansas.

s/ John W. Lungstrum
John W. Lungstrum
United States District Judge

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