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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1 UNITED STATES DISTRICT COURT 2 DISTRICT OF NEVADA 3 *** 4 JANINE L. GRONEMAN, 5 6 7 Plaintiff, v. MICHAEL J. ASTREW, 8 Case No. 2:12-cv-01839-APG-GWF ORDER GRANTING MOTION FOR ATTORNEY’S FEES (ECF No. 38) Defendant. 9 10 Plaintiff Janine L. Groneman’s attorneys move for an award of attorney’s fees following 11 Groneman’s successful motion for a remand for an award of benefits. No party opposed the 12 motion, although the defendant filed an informative brief without taking a position on fees. I 13 grant the motion. 14 Groneman entered into a contingency fee agreement with her attorneys for 25% of any 15 past-due benefits awarded upon a court-ordered reversal of an unfavorable decision by an 16 administrative law judge. ECF No. 38-2 at 1. I reversed the administrative law judge’s decision 17 in this case and remanded for an award of benefits. ECF No. 27. Upon remand, the Social 18 Security Administration awarded Groneman $77,153.00 in past-due benefits plus future monthly 19 benefits.1 ECF No. 38-3. 20 Groneman’s attorneys present evidence that two lawyers and two paralegals expended 21 28.7 hours on Groneman’s case before this court. ECF No. 38-4. They request essentially the 22 contingency amount of $19,288.00.2 I previously granted the parties’ stipulation to award 23 Groneman $3,500.00 in attorney’s fees under the Equal Access to Justice Act (EAJA). ECF No. 24 25 26 27 28 1 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. 2 Groneman’s attorneys have disclaimed any fee for work performed before the Social Security Administration. ECF No. 38 at 7. 1 36. Groneman’s attorneys agree they will credit this amount against any fee awarded under 42 2 U.S.C. § 406(b). ECF No. 38 at 7; see also Gisbrecht v. Barnhart, 535 U.S. 789, 796 (2002) 3 (stating that a claimant may obtain fee awards under both § 406(b) and the EAJA but the attorney 4 must refund the smaller fee amount to the claimant). 5 Under 42 U.S.C. § 406(b)(1)(A), when a claimant who is represented by counsel obtains a 6 favorable court judgment, “the court may determine and allow as part of its judgment a 7 reasonable fee for such representation, not in excess of 25 percent of the total of the past-due 8 benefits to which the claimant is entitled by reason of such judgment.” This fee is payable out of 9 the past-due benefits awarded to the claimant and not as an additional recovery from the 10 defendant. Id. 11 Although other fee-shifting schemes resort to use of the “lodestar” method to calculate a 12 reasonable attorney’s fee, § 406(b) is not a fee-shifting statute. Gisbrecht, 535 U.S. at 802. The 13 statute requires the attorney’s fee be taken from the past-due benefits awarded to the claimant and 14 not as an additional recovery from the defendant. Id. Thus, § 406(b) “does not displace 15 contingent-fee agreements as the primary means by which fees are set for successfully 16 representing Social Security benefits claimants in court. Rather, § 406(b) calls for court review of 17 such arrangements as an independent check, to assure that they yield reasonable results in 18 particular cases.” Id. at 807. The only statutorily-imposed constraint is that the fee agreement 19 cannot “provide for fees exceeding 25 percent of the past-due benefits.” Id. (citing 20 § 406(b)(1)(A)). 21 Consequently, in Social Security cases, I begin with the contingency fee agreement and 22 then “test[] it for reasonableness.” Id. at 808. “[T]he question is whether the amount need[s to] be 23 reduced, not whether the loadstar amount should be enhanced.” Crawford v. Astrue, 586 F.3d 24 1142, 1149 (9th Cir. 2009) (en banc). I may reduce the fee award “based on the character of the 25 representation and the results the representation achieved.” Gisbrecht, 535 U.S. at 808. Thus, I 26 “may properly reduce the fee for substandard performance, delay, or benefits that are not in 27 proportion to the time spent on the case.” Crawford, 586 F.3d at 1151. I may “consider the 28 Page 2 of 3 1 lodestar calculation, but only as an aid in assessing the reasonableness of the fee.” Id. (emphasis 2 omitted). 3 The attorney seeking the fee award bears the burden of establishing the fee sought is 4 reasonable. Id. at 1148. The award of fees under § 406(b) lies within my discretion. Id. at 1147. 5 The fee agreement in this case provides for an award of 25% of past-due benefits, which 6 amounts to $19,288.25. There is no evidence of substandard performance. Rather, counsel 7 obtained a favorable result in the form of a remand for an award of substantial past and future 8 benefits. There is no evidence counsel caused any delay to increase the contingent amount. 9 Additionally, the fees are not excessively large in relation to the past-due and future benefits 10 obtained for the claimant. See ECF No. 38-3 (Social Security Administration’s calculation on 11 remand of past-due benefits of $77,153.00 and future monthly benefits in the amount of 12 $1,014.00 per month). Groneman’s attorneys therefore have met their burden of establishing a 13 reasonable fee award in the amount of $19,288.00. 14 IT IS THEREFORE ORDERED that the motion for attorney’s fees (ECF No. 38) is 15 GRANTED. Plaintiff Janine L. Groneman’s attorney, Marc V. Kalagian,3 is awarded attorney’s 16 fees pursuant to 42 U.S.C. § 406(b) in the amount of $19,288.00. 17 18 19 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. 20 21 ANDREW P. GORDON UNITED STATES DISTRICT JUDGE 22 23 24 25 26 27 28 3 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. Page 3 of 3

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