Shuffield v. Michael J. Astrue

Filing 28

ORDER Granting 24 Plaintiff's Motion for Attorney Fees in the amount of $19,980.00. Signed by Judge Kent J. Dawson on 05/15/2014. (Copies have been distributed pursuant to the NEF - AC)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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JAMES D. SHUFFIELD,
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Plaintiff,

Case No. 2:12-CV-00243-KJD-PAL

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v.

ORDER

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CAROLYN W. COLVIN, Acting
Commissioner of Social Security,

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Defendant.

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Presently before the Court is Plaintiff’s Motion for Attorney Fees pursuant to 42 U.S.C. §

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406(b) (#24). Defendant filed a Response (#26). Additionally, the attorney for Plaintiff agrees to

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reimburse Plaintiff $3,400.00 in Equal Access to Justice Act (“EAJA”) fees already received from

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the SSA (#24, 2:4).

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I. Background

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After being denied benefits by the Social Security Administration (“SSA”), James D.

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Shuffield (“Plaintiff”) retained an attorney and agreed to a 25% contingency fee on any past-due

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benefits that might be awarded by the SSA (#24, 11:9). Following the Court’s stipulated remand the

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Commissioner (“Defendant”) awarded past-due benefits of $131,965.00 to Plaintiff (#24, 4:5–8).

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II. Legal Standard

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Under 42 U.S.C. § 406(b)(1)(A) district courts are to determine what attorney fees are

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“reasonable” for Social Security Disability Insurance (“SSDI”) claimants, but those fees must not

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exceed “25 percent of the total past-due benefits to which the claimant is entitled.” In determining

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what are reasonable attorney fees, this Court follows the approach outlined in the en banc Ninth

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Circuit decision Crawford v. Astrue, 586 F.3d 1142 (9th Cir. 2009). The reviewing court must

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respect “the primacy of lawful attorney-client fee agreements,” but also test them “for

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reasonableness.” Crawford , 586 F.3d at 1148. Crawford, a consolidation of three separate cases

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(Crawford, Trejo, and Washington), applied the factors articulated by the Supreme Court in

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Gisbrecht v. Barnhart, 535 U.S. 789, 808 (2002). Fees may be reduced by the court “if the attorney

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[1] provided substandard representation, or [2] engaged in dilatory conduct in order to increase the

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accrued amount of past-due benefits, or [3] if the benefits are large in comparison to the amount of

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time counsel spent on the case.” Id. at 1148. See Gisbrecht, 535 U.S. at 808 (court should prevent

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“windfalls for lawyers”). To determine whether the contingency fee is unreasonable the court may

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require the attorney to provide a statement of the number of hours worked on the case, and the

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attorney’s regular hourly rate. Crawford, 586 F.3d at 1148. “The attorney bears the burden of

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establishing that the fee sought is reasonable.” Id. at 1148.

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III. Analysis

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Counsel for Plaintiff is asking the Court to approve a contingency fee of $32,991.25, which is

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25% of the total $131,965.00 past-due benefits awarded to Plaintiff. The attorney fees are thus at the

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25% cap allowed by 42 U.S.C. § 406(b). There is no evidence that Plaintiff’s attorney provided

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“substandard representation,” or that he was “dilatory.” To the contrary, counsel billed only 22 hours

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on this case. Plaintiff has been served with a notice of this motion and has made no objection (#24,

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13).

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As no evidence has been provided of “substandard representation,” or “dilatory conduct,” the
remaining question before the Court is whether “the benefits are large in comparison to the amount
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of time counsel spent on the case”; does the 25% contingency fee represent a “windfall”? In

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answering this question the court may use as an aid the number of hours worked on the case and the

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attorney’s regular hourly rate. Counsel worked for 22.2 hours on this case (#24, 4:16). 25% of the

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total $131,965.00 past-due benefits awarded to Plaintiff is $32,991.25. Therefore, counsel’s hourly

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rate for this case is $1,486.09.

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“The attorney bears the burden of establishing that the fee sought is reasonable.” Crawford,

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586 F.3d at 1148. Counsel argues that the hourly rates for the Crawford and Trejo portions of the

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Crawford decision, after awarding past-due benefits, were effectively and respectively $875 and

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$902. Crawford, 586 F.3d at 1153. (Clifton J. concurring in part and dissenting in part). However,

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counsel fails to point out that for neither of these awards did the attorney ask for the full 25%

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contingency fee. In the Crawford portion the attorney requested 16.95% of the total. Crawford, 586

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F.3d at 1145. In Crejo the attorney asked for only 13.94%. Id. at 1146. Counsel argues that his rate

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($1,486.09) is comparable, but in reality it is over $500 more per hour than the highest hourly rate in

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Crawford. Counsel quotes from unpublished decisions, such as Johnson v. Astrue, 473 Fed. Appx.

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799, 800 (June 14, 2012 9th Cir.), to show that there have been cases where the full 25% contingency

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fee was granted, and the total amount ($48,547) was higher than the amount he is requesting.

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However, counsel neglected to mention that the attorney in Johnson had worked a total of 73.3 hours.

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See 2:07-cv-01509-PMP-PAL at Docket No. 42 (5:13). Therefore, the attorney’s effective hourly rate

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was $662.31 per hour. Counsel has brought forth other unpublished cases where the 25%

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contingency fee was granted. See Saxton v. Astrue, 2010 WL 536907 (N.D. Cal. 2010). But the

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hourly rate in Saxton was $488.75. Id. And lastly, in Frey v. Astrue, 2012 WL 443855 (E.D. Cal.

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2012), the Court awarded the full 25% contingency fee of $17,603.35. But in that case the attorney

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had worked 20.25 hours, giving the attorney an hourly rate of $869.30.

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Another factor not brought forward by counsel in support of his request for the full 25% fee

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was made clear in the Crawford decision. The attorney in Crawford claimed that the average attorney

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representing SSDI claimants could expect to be paid in only about 35% of the cases. Crawford, 586
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F.3d at 1145. Since nearly two-thirds of SSDI cases will end up yielding no money, it seems fair and

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reasonable to take into consideration the risk attorneys have assumed in taking such. Therefore, on

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one side the Court considers both the risk assumed by counsel, and the “primacy” of the contingency

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fee agreement; and on the other side, the Court weighs its duty to prevent “windfalls.” In balancing

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these interests it seems reasonable and fair to grant counsel the highest hourly rate approved by the

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Court in Crawford, which is around $900 per hour. Applying it to this case: $900 × 22.2 hours =

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$19,980.00. This amount is 15.14% of the total past-due benefits awarded, a reasonable percentage in

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light of the percentages granted in Crawford and Crejo, and the facts of this case.

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IV. Conclusion

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Accordingly, Plaintiff’s Motion for Attorney Fees (#24) is HEREBY GRANTED in the
amount of $19,980.00;
IT IS FURTHER ORDERED that the Clerk of the Court order the payment of attorney fees

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in the amount of $19,980.00 to Plaintiff’s attorney, Marc V. Kalagian, and further order counsel to

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reimburse Plaintiff the amount of $3,400.00 for the EAJA fees previously received, and to release the

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balance of the past-due benefits to the Plaintiff.

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DATED this 15th day of May 2014.

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_____________________________
Kent J. Dawson
United States District Judge

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