Groneman v. Astrue

Filing 40

ORDER Granting 38 Motion for Attorney's Fees. Plaintiff Janine L. Groneman's attorney, Marc V. Kalagian, is awarded attorney's fees pursuant to 42 U.S.C. § 406(b) in the amount of $19,288.00. FURTHER ORDERED that Marc V. Kalagian shall reimburse plaintiff Janine L. Groneman the amount of $3,500.00 for EAJA fees previously paid by the Commissioner. Signed by Judge Andrew P. Gordon on 1/5/2017. (Copies have been distributed pursuant to the NEF - SLD)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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***

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JANINE L. GRONEMAN,

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Plaintiff,
v.
MICHAEL J. ASTREW,

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Case No. 2:12-cv-01839-APG-GWF
ORDER GRANTING MOTION FOR
ATTORNEY’S FEES
(ECF No. 38)

Defendant.

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Plaintiff Janine L. Groneman’s attorneys move for an award of attorney’s fees following

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Groneman’s successful motion for a remand for an award of benefits. No party opposed the

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motion, although the defendant filed an informative brief without taking a position on fees. I

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grant the motion.

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Groneman entered into a contingency fee agreement with her attorneys for 25% of any

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past-due benefits awarded upon a court-ordered reversal of an unfavorable decision by an

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administrative law judge. ECF No. 38-2 at 1. I reversed the administrative law judge’s decision

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in this case and remanded for an award of benefits. ECF No. 27. Upon remand, the Social

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Security Administration awarded Groneman $77,153.00 in past-due benefits plus future monthly

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benefits.1 ECF No. 38-3.

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Groneman’s attorneys present evidence that two lawyers and two paralegals expended

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28.7 hours on Groneman’s case before this court. ECF No. 38-4. They request essentially the

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contingency amount of $19,288.00.2 I previously granted the parties’ stipulation to award

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Groneman $3,500.00 in attorney’s fees under the Equal Access to Justice Act (EAJA). ECF No.

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The award letter does not specify the amount awarded for past-due benefits but it states that the
Administration withheld $19,288.25 for potential attorney’s fees. ECF No. 38-3 at 3-4. Based on the 25%
cap on attorney’s fees under 42 U.S.C. § 406, it appears the Administration awarded $77,153.00 in pastdue benefits.
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Groneman’s attorneys have disclaimed any fee for work performed before the Social Security
Administration. ECF No. 38 at 7.

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36. Groneman’s attorneys agree they will credit this amount against any fee awarded under 42

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U.S.C. § 406(b). ECF No. 38 at 7; see also Gisbrecht v. Barnhart, 535 U.S. 789, 796 (2002)

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(stating that a claimant may obtain fee awards under both § 406(b) and the EAJA but the attorney

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must refund the smaller fee amount to the claimant).

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Under 42 U.S.C. § 406(b)(1)(A), when a claimant who is represented by counsel obtains a

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favorable court judgment, “the court may determine and allow as part of its judgment a

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reasonable fee for such representation, not in excess of 25 percent of the total of the past-due

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benefits to which the claimant is entitled by reason of such judgment.” This fee is payable out of

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the past-due benefits awarded to the claimant and not as an additional recovery from the

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defendant. Id.

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Although other fee-shifting schemes resort to use of the “lodestar” method to calculate a

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reasonable attorney’s fee, § 406(b) is not a fee-shifting statute. Gisbrecht, 535 U.S. at 802. The

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statute requires the attorney’s fee be taken from the past-due benefits awarded to the claimant and

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not as an additional recovery from the defendant. Id. Thus, § 406(b) “does not displace

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contingent-fee agreements as the primary means by which fees are set for successfully

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representing Social Security benefits claimants in court. Rather, § 406(b) calls for court review of

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such arrangements as an independent check, to assure that they yield reasonable results in

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particular cases.” Id. at 807. The only statutorily-imposed constraint is that the fee agreement

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cannot “provide for fees exceeding 25 percent of the past-due benefits.” Id. (citing

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§ 406(b)(1)(A)).

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Consequently, in Social Security cases, I begin with the contingency fee agreement and

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then “test[] it for reasonableness.” Id. at 808. “[T]he question is whether the amount need[s to] be

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reduced, not whether the loadstar amount should be enhanced.” Crawford v. Astrue, 586 F.3d

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1142, 1149 (9th Cir. 2009) (en banc). I may reduce the fee award “based on the character of the

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representation and the results the representation achieved.” Gisbrecht, 535 U.S. at 808. Thus, I

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“may properly reduce the fee for substandard performance, delay, or benefits that are not in

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proportion to the time spent on the case.” Crawford, 586 F.3d at 1151. I may “consider the

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lodestar calculation, but only as an aid in assessing the reasonableness of the fee.” Id. (emphasis

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omitted).

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The attorney seeking the fee award bears the burden of establishing the fee sought is

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reasonable. Id. at 1148. The award of fees under § 406(b) lies within my discretion. Id. at 1147.

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The fee agreement in this case provides for an award of 25% of past-due benefits, which

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amounts to $19,288.25. There is no evidence of substandard performance. Rather, counsel

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obtained a favorable result in the form of a remand for an award of substantial past and future

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benefits. There is no evidence counsel caused any delay to increase the contingent amount.

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Additionally, the fees are not excessively large in relation to the past-due and future benefits

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obtained for the claimant. See ECF No. 38-3 (Social Security Administration’s calculation on

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remand of past-due benefits of $77,153.00 and future monthly benefits in the amount of

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$1,014.00 per month). Groneman’s attorneys therefore have met their burden of establishing a

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reasonable fee award in the amount of $19,288.00.

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IT IS THEREFORE ORDERED that the motion for attorney’s fees (ECF No. 38) is

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GRANTED. Plaintiff Janine L. Groneman’s attorney, Marc V. Kalagian,3 is awarded attorney’s

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fees pursuant to 42 U.S.C. § 406(b) in the amount of $19,288.00.

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IT IS FURTHER ORDERED that Marc V. Kalagian shall reimburse plaintiff Janine L.
Groneman the amount of $3,500.00 for EAJA fees previously paid by the Commissioner.
DATED this 5th day of January, 2017.

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ANDREW P. GORDON
UNITED STATES DISTRICT JUDGE

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Although another attorney and two paralegals worked on the case, Groneman’s counsel has
proposed a form of order directing payment to Marc V. Kalagian. ECF No. 38-1.

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