Davis v. Commissioner of Social Security Administration

Filing 38

OPINION and ORDER - For the reasons stated, Plaintiff's Motion 33 for Attorneys' Fees pursuant to 42 USC § 406(b) is GRANTED in part and DENIED in part and a § 406(b) fee of $6,333.67 shall be awarded to Mr. Linerud. IT IS SO ORDERED. Dated this 20th day of January, 2015, by United States Magistrate Judge John V. Acosta. (peg)

UNITED STATES DISTRICT COURT
DISTRICT OF OREGON
PORTLAND DIVISION

JANICE DAVIS,
Case No.: 3:09-CV-00649-AC
Plaintiff,
OPINION AND ORDER

v.
CAROLYN COLVIN, Acting
Commissioner of Social
Security Administration,
Defendant.
ACOSTA, Magistrate Judge:

Introduction
Before the court is Janice Davis's ("Davis") unopposed Motion for Attorney Fees under 42
U.S.C. § 406(b). A court may award attorney fees to the attorney of a successful Social Security
claimant, so long as the award is "a reasonable fee for such representation" and is "not in excess of
25 percent of the total of the past-due benefits to which the claimant is entitled .... " 42 U.S.C. §

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406(b)(1 )(A). Although Davis is the claimant in this case, the real party in interest to this motion
is her attorney Rory Linernd ("Linerud"). The Commissioner of the Social Security Administration
("Commissioner") does not oppose the motion, but merely acts in a manner similar to "a trustee for
the claimant[]." Gisbrecht v. Barnhart, 535 U.S. 789, 798 n. 6 (2002). Having reviewed the
proceedings below and the amount of fees sought, the court concludes a fee award of$6,333.67 is
reasonable.
Procedural Background
Davis filed for Supplemental Security Income ("SSI") benefits on June 22, 1999. Davis v.
Astrue, Civil No. 09-649-AC, 2011WL31081, *1 (D. Or. Jan. 5, 2011). Her claim was denied
initially and on reconsideration. (Id.) Davis requested, obtained, and appeared for a hearing before
an Administrative Law Judge ("ALJ"). (Id.) The ALJ issued a decision on July 26, 2001, finding
Davis not disabled. (Id.) The Appeals Council denied Davis's timely request for review, making
the ALJ' s opinion the Commissioner's final decision. (Id.) A request for reivew was filed in this
court on June 10, 2009. (Id.)
The court reversed the ALJ's decision for erroneously applying Medical-Vocational
Guidelines ("the grids") and failing to consult a vocational expe1t. (Id. at* 10). The court affirmed
the remainder of the ALJ' s findings. (Id.) The court's reversal resulted in the Commissioner
awarding Davis $42,721.56 in back SSI payments. (Pl. 's Mem. 1, ECF No. 34-1).
Discussion
The parties do not dispute that Davis is the prevailing party in this matter.

The

Commissioner does not challenge the amount Linerud requests as attorney fees. However, because
the Commissioner does not have a direct stake in the allocation of Davis's attorney's fees, the court
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must ensure the calculation of fees is reasonable to prevent Linerud from potentially receiving a
windfall. See Gisbrecht, 535 U.S.at 798 n.6 ("We also note that the Commissioner of Social
Security here ... has no direct financial stake in the answer to the§ 406(b) question.").
After entering a judgment in favor of a Social Security claimant represented by counsel, the
court "may determine and allow as part of its judgment a reasonable fee for such representation, not
in excess of twenty-five 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). 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, at *7 (D.
Or. Dec. 23, 2009), adopted 2010 WL 1029809 (March 17, 2010) (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 smaller of the
two payments. Gisbrecht, 535 U.S. at 796.
I. Fee Agreement

Under the Supreme Court's decision in Gisbrecht, the comt first examines the contingent fee
agreement to determine whether it is within the statutory twenty-five percent cap. In the motion for
attorney fees, Linerud requests the court award $10,329 .89,just under twenty-five percent ofDavis' s
retroactive-benefit award. Because Linerud received a $2,963.23 fee award under the EAJA, that
amount will offset part of the $10,329.89 award if the court rules in his favor. Thus, $7,366.66 is
the total amount at issue.
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Counsel bears the burden to establish the reasonableness ofthe requested fee. Gisbrecht, 535
U.S. at 807.

While the court must acknowledge the "primacy of lawful attorney-client fee

agreements," contingent fee agreements that fail to "yield reasonable results in particular cases" may
be rejected." Id. at 793, 807. The comt must ensure a disabled claimant is protected from
surrendering retroactive disability benefits in a disproportionate payment to counsel. Crawford v.

Astrue, 586 F.3d 1142, 1151 (9th Cir. 2009)(en banc)(citing Gisbrecht, 535 U.S. at 808). The four
factors considered by the Ninth Circuit when evaluating the requested fee's reasonableness, as
derived from the Court's analysis in Gisbrecht are:
1.
2.
3.
4.

the character of the representation, specifically, whether the representation
was substandard;
the results the representative achieved;
any delay attributable to the attorney seeking the fee; and
whether the benefits obtained were "not in proportion to the time spent on the
case" and raise the specter that the attorney would receive an unwarranted
windfall.

Crawford, 586 F.3d at 1151-53 (citations omitted). In Crawford, the Ninth Circuit also identified
the risk inherent in contingency fee representation as an appropriate factor to consider in determining
a section 406(b) award. However, the court reiterated it is not the risk of taking contingency cases
generally, instead, "the district comt should look at the complexity and risk involved in the specific
case at issue to determine how much risk the firm assumed in taking the case." 586 F.3d at 1153.

A. The Character of the Representation
Substandard performance by a legal representative may warrant a reduction in a section
406(b) fee award. Crawford, 586 F.3d at 1151. The record in this case provides no basis for a
reduction in the requested fee due to the character ofLinerud's representation.

Ill
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B. Results Achieved

The court reversed the ALJ' s decision and Davis subsequently received an award of benefits,
a positive result.
C. Undue Delay

A court may reduce a section 406(b) award for delays in proceedings attributable to
claimant's counsel. Crawford, 586 F.3d at 1151. Here, Davis's opening brief was timely filed on
March 9, 2010, and no extensions were requested prior to filing. Linerud filed an untimely EAJA
fee motion. However, the reasons for the untimeliness were extenuating in that Linerud suffered
very serious medical complications and the result did not prejudice his client's case. Accordingly,
there is nothing in the record to suggest that there was a material delay attributable to Linerud. A
reduction ofLinerud's fee request is unwarranted under this factor.
D. Proportionality

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 Court explained "[i]fthe benefits are large in comparison to the amount of time counsel
spent on the case, a downward adjustment is ... in order." Gisbrecht, 535 U.S. at 808.
Davis cites Breedlove v. Astrue, 3:07-CV-1743-AC, 2011 WL 2531174 (D. Or. Mar. 15,
2011), wherein the court affirmed a fee agreement that resulted in an effective hourly rate of
$1,041.84. Davis also points to several cases decided by this court in which the effective hourly
rates awarded range from $982.00 to $1,491.25 per hour. Specifically, Davis states that "the fee
requested herein is a much lower effective hourly rate than in Breedlove." (Pl.'s Mem. in Supp. of
Atty's Fees 4, ECF No. 34.) However, because Linerud "has not taken a case on a non-contingent
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basis for several years," he provided "no hourly rate for purposes of comparison." (Id. at 3 .) In sum,
Linerud argues "there is no windfall to the attorney herein if the court awards the requested fee,"
although he provides no evidence of how much time he spent on the case, nor an estimate of an
hourly rate for the requested fee. (Id at 4.)
Linerud filed an eighteen-page opening brief asserting five grounds on which the ALJ
allegedly committed error, all of which were arguments routinely asserted in similar cases. By
Linerud's own admission, "[t]his case represented an average risk case, and involved many of the
issues seen in similar proceedings." (Id at 2.) Davis prevailed on the argument regarding the ALJ's
erroneous application of the grids and subsequent failure to consult a vocational expert. Thus, this
case was one of average difficulty and the briefing submitted was less extensive than in other cases,
but not substantially so.
Generally, "district courts have noted that twenty to forty hours is the range most often
requested and granted in social security cases." Costa v. Comm 'r Soc. Sec. Admin., 690 F.3d 1132,
1136 (9th Cir. 2012) (citing Patterson v. Apfel, 99 F. Supp. 2d 1212, 1214 n.2 (C.D. Cal. 2000)).
The Ninth Circuit has established that"[ w]hile district courts may consider this fact in determining
the reasonableness of a specific fee request, courts cannot drastically reduce awards simply because
the attorney has requested compensation for more than forty hours or make reductions with a target
number in mind." Id However, district courts may impose reductions of no greater than ten percent
in their discretion without further explanation. Id (citing Moreno v. City ofSacramento, 534 F.3d
1106, 1112 (9th Cir. 2008)).
In the Upper Willamette Valley, where Linerud practices, attorneys with Linerud's amount
of experience in private practice bill at an average rate of $243 per hour. Oregon State Bar 2012
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Economic

Survey,

28-33,

Oregon

State

Bar

(2012)

available

at www.osbar.org/_

docs/resources/Econsurveys/12EconomicSurvey.pdf. Attorneys, such as Linerud who represent
plaintiffs in civil litigation in the Upper Willamette Valley bill at an average rate of $201 per hour.

Id. Given the amount Linerud is seeking and the average range of20-40 hours for a typical social
security case, Linerud's effective hourly rate ranges from $258.25 to $516.50. 1
As a result ofLinerud's efforts, Davis is entitled to $42,721.56. Linerud seeks $10,329.89
in compensation, which represents 24.2% of Davis's past-due benefits. Linerud's effective hourly
rate, although higher than average rates, is not unreasonable considering the contingent nature of the
case. Further, Linerud's requested fee represents 24.2% of Davis's award while the statute permits
up to a 25% award of attorney fees. For these reasons, the coutt will not substantially reduce
Linerud's fee award.
However, Linerud failed to satisfy his burden of proving his fee's reasonableness in that he
failed to provide the court with time records or an estimated hourly rate for his services. Thus, the
coutt will exercise its discretion and apply a ten percent "haircut" to Linerud's fees.2 See Moreno
v. City of Sacramento, 534 F.3d at 1112 ("[T]he district court can impose a small reduction, no

greater than 10 percent - a "haircut" - based on its exercise of discretion and without more
explanation.").
E. Risk

The nature of contingency work is a factor to be considered when evaluating risk under
Crawford, but the risk analysis should focus on the complexity and risk involved in the specific case

1

Total fees sought by Linerud is $10,329.89/(20-40 hours)= $516.50-$258.25 per hour.

2

($10,329.89 total fees/.l) = $1,032.99 Reduction.

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at issue .... " 586 F.3d at 1153. Davis points to no substantial risks to this case. As a result, the
court finds that the degree ofrisk was typical and does not weigh either for or against a reduced fee
award.
Conclusion

For the reasons stated, Plaintiffs Motion for Attorneys' Fees pursuant to 42 U.S.C. § 406(b)
(Dkt. No. 34) is GRANTED in part and DENIED in part and a§ 406(b) fee of$6,333.67 shall be
awarded to Mr. Linerud. 3
IT IS SO ORDERED
Dated this 20th day of Janmuy, 2015

Unite

HNV.AC STA
tates Magistrate Judge

3

$10,329.89 Total fees requested- $2,963.23 BAJA fee award - $ 1,032.99 Reduction=
$6,333.67.
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