Paredes v. Commissioner Social Security Administration

Filing 27

OPINION and ORDER - Paredes's Motion 24 for Approval of Attorney Fees Pursuant to 42 U.S.C. § 406(b) in the amount of $12,909.68 is GRANTED. As Stevens was not awarded any fees under the EAJA, he is entitled to the entirety of the $12,909.68 without any offset. IT IS SO ORDERED. DATED this 27th day of December, 2016, by United States Magistrate Judge John V. Acosta. (peg)

UNITED STATES DISTRICT COURT
DISTRICT OF OREGON
PORTLAND DIVISION

MIRANDA LYNN PAREDES,

Case No. 1: 13 :-cv-1570-AC

Plaintiff,

OPINION AND ORDER

v.
COMMISSIONER OF SOCIAL
SECURITY,
Defendant.

ACOSTA, Magistrate Judge:

Introduction
Before the comt is Miranda Paredes' s ("Paredes") unopposed Motion for Approval of Attorney
Fees Pursuant to 42 U.S.C. § 406(b) ("Section 406(b)"). Although Paredes is the claimant in this case,
the real pmty in interest to this motion is her attorney Arthur Stevens ("Stevens"). The Conunissioner does
not oppose the motion, but merely acts in amanner similar to "a trustee for the claimant[]." Gisbrechtv.

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Barnhart, 535 U.S. 789, 798 (2002). Having reviewed the proceedings below and the amount of fees
sought, the coutt concludes Stevens is entitled to fees under Section 406(b) in the amountof$12,909.68.

Procedural Background
Paredes filed applications for Disability Insurance Benefits and Supplemental Security Income
("Benefits") on January 15, 2009, alleging an onset date of August 31, 2003. Her applications were denied
initially and on reconsideration. On April 25, 2012, an Administrative Law Judge ("ALJ") issued an
opinion in which he found Paredes not disabled and, therefore, not entitled to Benefits. That decision
became the final decision of the Commissioner on July 2, 2013, when the Appeals Council denied
Paredes's request for review.
Paredes sought review of the Commissioner's decision by filing a complaint in this court on
September 5, 2013. Paredes alleged theALJ erred in four respects: (1) rejecting Paredes's subjective
symptom testimony; (2) improperly rejecting lay witness testimony; (3) failing to recontact a medical source
to resolve an ambiguity; and (4) basing his decision on the opinion ofa vocational expe1tto whom the ALJ
provided an incomplete hypothetical. On March 16, 2015, this comt issued an Opinion and Order finding
the ALJ improperly rejected Paredes' s testimony and the lay witness evidence, and therefore presented
an incomplete hypothetical to the VE (the "O&O"). Concluding that Paredes could not perfonn any jobs
that exist in the national economy, the co mt reversed andremanded the ALJ' s decision for the immediate
calculation and payment of benefits.
On September 16, 2016, Paredes filed the instant motion for attorney fees in the amount of
$12,909 .68 under Section 406(b ). The Commissioner does not oppose the motion.

Discussion
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The parties do not dispute Paredes is the prevailing party in this matter. Additionally, the
Commissioner does not challenge the amount Stevens requests as attorney fees. Nonetheless, because
the Commissioner does not have a direct stake in the allocation of Paredes' s attorney fees, the coUJt must
ensure the calculation offees is reasonable to prevent Stevens from potentially receiving a windfall. See

Gisbrecht, 535 U.S. at 798 n.6 ("We also note thatthe Commissioner of Social Security ... has no direct
financial stalce in the answer to the§ 406(b) question.").
After entering a judgment in favor of a Social Security claimant represented by counsel, a court
"may detennine and allow as pmi ofits 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." 42 U.S.C. § 406(b)(l)(A) (2015). A "twenty-five percent contingent-fee award is not
automatic or even presumed; 'the statute does not create any presumption in favor of the agreed upon
amount."' Dunnigan v. Astrue, No. CV 07-1645-AC, 2009 WL 6067058, *7 (D. Or. Dec. 23, 2009),

adopted2010 WL 1029809 (March 17, 201 O)(quoting Gisbrecht, 535 U.S. at 807 n.17). A Section
406(b) fee award is paid from the claimant's retroactive benefits, and an attorney receiving such an award
may not seek any other compensation from the claimant. Dunnigan, 2009 WL 6067058, at *7.
Accordingly, when a court approves both an EAJA fee and a Section 406(b) fee payment, the claimant's
attorney must refund to the claimant the amount ofthe smaller of the two payments. Gisbrecht, 53 5 U.S.
at 796.

I. Fee Agreement
Under the Supreme Court's decision in Gisbrecht, the court first examines the contingent fee
agreement to dete1mine whether it is within the statut01ytwenty-five percent cap. Paredes and Stevens
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executed a contingent-fee agreement, which provided if Stevens obtained payment ofpast-due benefits,
Paredes would pay him up to twenty-five percent ofthe past-due benefits awarded. (Mot. for Approval
of Attorney Fees Pursuant to 42 U.S.C. §406(b), ECFNo. 24 ("Pl. 's Mot."), Ex. C.) The terms of this
agreement are thus within the statute's limits.
The next step is to confirm that the fee requested by counsel does not exceed the statute's
twenty-five percent ceiling. This detetmination requires evidence ofthe retroactive benefits to be paid to
Paredes. Stevens provided a document from the Society Security Administration (the "Administration")
entitled "Notice ofAward," which details the retroactive benefits due Paredes and states it has withheld
$12,909 .68 in reserve to pay any attorney fees awarded by the court, which represents twenty-five percent
of the past due benefits. (Pl.'s Mot. Ex. 2, at 3.) Stevens seeks the full amount withheld by the
Administration for attorney fees. After determining the fee agreement and the amount requested are in
accordance with the statutory limits, this couttnext turns to "its primaiy inquity, the reasonableness ofthe
fee sought." Dunnigan, 2009 WL 6067058, at* 10.
II. Reasonableness Factors

An order for an awai·d of benefits should not be viewed in isolation, nor can it be presumed always
to require a fee award oftwenty-five percent of a claimant's retroactive benefits award. Dunnigan, 2009
WL 6067058, at* 12. If obtaining benefits always supp01ted awarding fees forthe maximum amount
provided for by statue, the other Gisbrecht factors and the trial courts' assigned task of "'making
reasonableness determinations in a wide variety of contexts"' would be uttnecessaty. Id. (quoting

Gisbrecht, 535 U.S. at 808). Here, Stevens seeks twenty-five percent of the past due benefits, the full
amount of the statut01y cap.
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Counsel bears the burden to establish the reasonableness ofthe requested fee. Gisbrecht, 535
U.S. at 807. While the courtmustaclmowledge the "primacy oflawful attorney-client fee agreements,"
contingent fee agreements that fail to "yield reasonable results in particular cases" may be rejected. Id. at
793, 807. The court must ensure a disabled claimant is protected from sunendering retroactive disability
benefits in a disproportionate paymentto counsel. Crawford v. Astrue, 5 86 F .3d 1142, 1151 (9th Cir.
2009) (en bane) (citing Gisbrecht, 535 U.S. at 808). The four factors to be considered when evaluating
the requested fee's reasonableness have been identified by the Ninth Circuit from the Gisbrecht analysis
as: (

1) the character of the representation, specifically, whether the representation was
substandard; (2) the results the attorney achieved; (3) any delay attributable to the attorney
seeking the fee; and (4) whether the benefits obtained were "not in prop011ion to the time
spent on the case" and raise the specter the attorney would receive an unwananted
windfall. Crawford, 586 F.3d at 1151-53 (citations omitted). The Ninth Circuit, in

Crawford, also identified the risk inherent in contingency representation as an appropriate
factor to consider in determining a Section 406(b) award. It focused the risk inquiry,
however, stating that: "the district com1 should look at the complexity and risk involved in
the specific case at issue to dete1mine how much risk the fnm assU111ed in taking the case."
586 F.3d at 1153.

A. The Character ofRepresentation
Substandard performance by a legal representative maywanant a reduction in a Section 406(b)
fee award. Crawford, 586 F.3d at 1151. The record in this case, however, provides no basis for a
reduction in the requested Section 406(b) fee due to the character of Stevens' s representation. In fact,
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Stevens prevailed on three of his four argwnents.
B. Results Achieved

The court ordered a remand of Paredes' s claim for the immediate calculation and payment of
benefits. This was the best result available, and thus does not weigh against Stevens' s requested award.
C. Undue Delays

A court may reduce a Section 406(b) award for delays in proceedings attributable to claimant's
counsel. CraHford, 586 F .3d at 1151. The reduction is appropriate "so that the attorney will not profit
from the accwnulation ofbenefits during the pendency of the case in court." Gisbrecht, 535 U.S. at 808
(citation omitted).
Here, Paredes' s opening briefwas filed on March 20, 2014. The Commissioner filed the response
brief timely on May 22, 2014, and Paredes filed her reply brief on June 30, 2014, after filing a motion for
extension of time on June 6, 2014. The request for extension oftime extended the action by only a few
weeks, and the pendency of this action did not exceed the normal time span for Social Security Cases.
Moreover, the delay afforded by Paredes' s motion for extension oftime was not disproportionally long in
relation to the overall pendency ofthe action and was not unreasonable or unfounded. There is nothing in
the record to suggest the delay attributable to Stevens was "undue." Accordingly, a reduction of Stevens' s
fee request is unwananted under this factor.
D. Proportionality

Finally, a district court may reduce a Section 406(b) award if"benefits ... are not in proportion
to the time spent on the case." Crawford, 586 F.3d at 1151 (citing Gisbrecht, 535 U.S. at 808). The
Supreme CoUlt explained "[i]fthe benefits are large in comparison to the amount oftime counsel spent on
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the case, a downward adjustment is ... in order." Gisbrecht, 535 U.S. at 808.
In this case, Stevens filed a twenty-four-page opening briefasse1iing four ell'ors by the ALJ, and
a twenty-three-page reply brief bolstering his arguments in response to the Commissioner's opposition
brief. Stevens argued the case should be remanded to the Commissioner for an immediate award of
Benefits or, in the alternative, for further proceedings.
Stevens prevailed on his arguments when this court signed the Opinion and Order reversing the
Commissioner's decision, and remanded the matter for an immediate award of Benefits.
Based on the amount withheld by the Administration for attorney fees, Paredes is entitled to
approximately $51,639.32 in retroactive benefits. Stevens reports, and the time records confirm, he
expended slightly more than twenty-six hour representing Paredes in this matter. This time expenditure is
within the twenty-to-forty-hour range Judge Mosman found to be a "reasonable amount oftime to spend
on a social security case that does not present particular difficulty." Harden v. Comm 'r, 497 F. Supp. 2d
1214, 1215 (D. Or. 2007).
Stevens cunently seeks $12,909 .68 in attorney fees for his representation of Paredes before this
court, which results in an effectively hourly rate of$490.84. This hourly rate is justified by the positive
results Stevens achieved.

E. Risk
Stevens discusses the substantial risk of nonpayment and the significant delay in payment
undertaken by Social Security practitioners. He also describes the risks unique to this case, emphasizing
that the arguments on appeal turned on medically technical issues and required specialized attorney
representation. Overall, the outcome of the case was far from assured. The court finds no reduction of
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the request fee is walTanted based on the risk and complexity of the case.
Conclusion

For the reasons stated, Paredes's Motion for Approval of Attorney Fees Pmsuant 42 U.S.C.

§ 406(b) (ECF No. 24) in the amount of$12,909.68 is GRANTED. As Stevens was not awarded
\\\\\

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any fees under the EAJA, he is entitled to the entirety of the $12,909.68 without any offset.
IT IS SO ORDERED.
DATED

thi~fay of December, 2016.

V.ACOSTA

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