Gonzales v. Social Security Administration

Filing 32

ORDER by Magistrate Judge Kirtan Khalsa granting 30 Plaintiff's Motion for Order Authorizing Attorney Fees Pursuant to 42 U.S.C. § 406(B). (glg)

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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW MEXICO

AMY DENISE GONZALES,
Plaintiff,
vs.

Civ. No. 18-502 KK

ANDREW SAUL,
Commissioner of Social Security
Administration,
Defendant.
ORDER
THIS MATTER comes before the Court on Plaintiff’s Motion for an Order Authorizing
Attorney Fees Pursuant to 42 U.S.C. § 406(B) and Supporting Memorandum (“Motion”), filed
September 15, 2020. (Doc. 30.) The Commissioner filed his Response1 to the Motion on October
20, 2020 (Doc. 31) indicating therein that he “does not object to the requested award” and “defers
to the Court’s sound discretion” as to its reasonableness. (Id. at 2.) Having considered Plaintiff’s
Motion, the Commissioner’s Response, and the relevant law, the Court finds Plaintiff’s Motion is
well taken and should be GRANTED.
BACKGROUND
On May 30, 2018, Plaintiff Amy Denise Gonzales (“Ms. Gonzales”) instituted an action in
this Court seeking judicial review of her denied claims for disability benefits. (Doc. 1.) On a prior
date, she had entered into a contingency-fee agreement with Michael D. Armstrong for
representation in the federal court review proceedings. (Doc. 30-1 at 21.) On August 20, 2020, the
Commissioner filed the 909-page administrative record. (Doc. 10.) On December 14, 2020, after

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The Commissioner also sought leave to file his Response out of time. The Court grants his request.

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seeking and obtaining two briefing deadline extensions totaling approximately eight weeks, Mr.
Armstrong filed a 23-page motion to remand containing comprehensive legal and medical record
analysis of issues Ms. Gonzales raised in support of her requested remand for further agency
consideration. (Docs. 17, 18, 20, 21, 22.) On February 9, 2019, the Commissioner filed an
Unopposed Motion to Remand to Agency (“Unopposed Motion”). (Doc. 24.) The Court granted
the Unopposed Motion and remanded the case pursuant to sentence four of 42 U.S.C. § 405(g).
(Doc. 25.) Ms. Gonzales subsequently filed an Unopposed Motion for Attorney Fees Pursuant to
the Equal Access to Justice Act, which the Court granted, and Ms. Gonzales was awarded
$5,534.80 in attorney fees for 27.4 hours of work Mr. Armstrong performed on her behalf in this
federal court action. (Docs. 27, 28.)
On remand, the ALJ issued a fully favorable decision dated January 8, 2020, finding that
Ms. Gonzales has been disabled since her alleged onset date of October 16, 2012. (Doc. 30-1 at
1-9.) A Notice of Award was sent to Ms. Gonzales on July 22, 2020, stating that the Social Security
Administration (“SSA”) had withheld $16,671.25 to cover any attorney fees. (Doc. 30-1 at 1217.) Ms. Gonzales’ substituted counsel of record, Laura Joellen Johnson of Michael Armstrong
Law Office, LLC, entered her appearance in this matter on August 31, 2020, (Doc. 29), and filed
the instant Motion on September 15, 2020, seeking an order authorizing fees pursuant to 42 U.S.C.
§ 406(b) in the amount of $10,671.25 for 27.4 hours of work performed before this Court. (Doc.
30; Doc. 30-1 at 18-20.)
As of September 15, 2020, Michael Armstrong Law Office, LLC had not received payment
of the EAJA award and represents to the Court that the Office of General Counsel indicated that a
debt reported by the United States Department of the Treasury could account for the non-payment
under the Treasury Offset Program. (Doc. 30 at 2.)

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LEGAL STANDARD
Attorney fees may be deducted from a successful social security claimant’s award of pastdue benefits. Separate subsections of 42 U.S.C. § 406 authorize fee awards for representation
before the SSA and in court, allowing attorneys to receive fees for their work in both settings. See
42 U.S.C. § 406(a), (b). Courts may award fees for representation in court proceedings under
§ 406(b) when, as in this case, “the court remands a . . . case for further proceedings and the
Commissioner ultimately determines that the claimant is entitled to an award of past-due benefits.”
McGraw v. Barnhart, 450 F.3d 493, 496 (10th Cir. 2006). In this case, as in many others, the EAJA
award effectively increases the past-due benefits. See Gisbrecht v. Barnhart, 535 U.S. 789, 796
(2002). The statute requires that a fee award for representation before a court be “reasonable” and
limits the award to no more than 25 percent of the claimant’s past-due benefits. 42 U.S.C.
§ 406(b)(1)(A). Separate awards of attorney fees – for example, fees pursuant to the EAJA and
§ 406(b) – are not collectively limited to 25 percent of past-due benefits. Wrenn v. Astrue, 525
F.3d 931, 936-38 (10th Cir. 2008). However, if fees are awarded under both the EAJA and
§ 406(b), the attorney must refund the lesser award to the claimant. McGraw, 450 F.3d at 497 n.2
(10th Cir. 2006).
While § 406(b) permits contingency-fee agreements, it requires the reviewing court to act
as “an independent check” to ensure that fees awarded pursuant to such agreements meet the
statute’s reasonableness requirement. Gisbrecht, 535 U.S. at 807. Fee agreements are flatly
unenforceable to the extent that they provide for fees exceeding 25 percent of past-due benefits,
but fees may be unreasonable even if they fall below this number, and there is no presumption that
fees equating to 25 percent of past-due benefits are reasonable. Id. at 807 n.17. The attorney
seeking fees bears the burden of demonstrating the reasonableness of the fee. Id. at 807.

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The reasonableness determination is “based on the character of the representation and the
results the representative achieved.” Id. at 808. If the attorney is responsible for delay, the fee may
be reduced so that the attorney does not profit from the accumulation of benefits while the case
was pending in court. Id. Such a reduction also protects the claimant, as fees paid under § 406(b)
are taken from, and not in addition to, the total of past-due benefits. 42 U.S.C. § 406(b)(1)(A). The
fee may also be reduced if the benefits are large in comparison to the amount of time spent on the
case. Gisbrecht, 535 U.S. at 808. A court may require the claimant’s attorney to submit a record
of the hours spent representing the claimant and a statement of the lawyer’s normal hourly billing
rate for noncontingent-fee cases. Id.
The statute does not contain a time limit for fee requests. However, the Tenth Circuit has
held that a request “should be filed within a reasonable time of the Commissioner’s decision
awarding benefits.” McGraw, 450 F.3d at 505 (citation omitted).
REASONBLENESS DETERMINATION
The fee agreement Ms. Gonzales entered into provides that she “agree[s] to pay my
attorney twenty-five percent (25%)” of all past-due benefits for work performed in this Court.
(Doc. 30-1 at 21.) The total fees sought in the Motion amount to approximately 16 percent of the
$66,685.00 in past-due benefits. (Doc. 30 at 5-6; Doc. 30-1 at 14.) The minimal delay caused by
two briefing extensions does not cause the Court concern regarding unfair attorney profiteering
from the delayed accumulation of benefits. And counsel’s representation was efficient, reflecting
his skill and expertise, and yielded a fully favorable decision. Counsel’s fee request of $10,671.25
is not disproportionately large in comparison to the amount of time spent on the case and results
in a reasonable hourly rate of $389.46, which is considerably less than other § 406(b) awards
authorized in this District. See, e.g., Valdez v. Barnhart, USDC Civ. No. 00-1777 MV/LCS (Docs.

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26-27) (awarding $645.16 per hour); Montes v. Barnhart, USDC Civ. No. 01-578 BB/KBM (Doc.
22) (awarding $701.75 per hour); Monger v. Astrue, USDC Civ. No. 13-156 JB/CG (Doc. 37)
(awarding $673.07 per hour); Gallegos v. Colvin, USDC Civ. No. 12-321 SMV (Doc. 32)
(awarding $617.28 per hour); Osborn v. Berryhill, USDC Civ. No. 15-cv-1069 KBM (Doc. 32)
(awarding $636.90 per hour). Thus, the Court finds that counsel’s fee request is reasonable.
Counsel’s fee request was also filed within a reasonable time after Ms. Gonzales received
notice of entitlement to past-due benefits. The Notice of Award is dated July 22, 2020, and counsel
filed the present Motion on September 15, 2020. (Doc. 30; Doc. 30-1 at 12.)
IT IS THEREFORE ORDERED that Plaintiff’s Motion (Doc. 30) is GRANTED. The
Court hereby authorizes $10,671.25 in attorney fees for legal services rendered in the United States
District Court, to be paid by the Social Security Administration out of the funds it withheld from
Ms. Gonzales’ past-due benefits.2
IT IS FURTHER ORDERED that counsel determine whether the EAJA fees previously
awarded have been garnished in whole by the United States Department of the Treasury pursuant
to the Treasury Offset Program, and if not, counsel shall refund to Ms. Gonzales any portion of
the EAJA fees subsequently received by him in accordance with Gisbrecht, 535 U.S. at 795.
IT IS SO ORDERED.

_________________________________________
KIRTAN KHALSA
United States Magistrate Judge

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Ms. Gonzales requests that if the Motion is granted fees be paid to Michael Armstrong Law, LLC or Laura Joellen
Johnson. (Doc. 30 at 2.) The fees will likely be issued in accordance with the fee contract, and how those fees are
ultimately dispersed among counsel is between Ms. Gonzales’ counsel and the parties to the fee contract.

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