Maloney v. Commissioner of Social Security

Filing 26

OPINION and ORDER - Plaintiffs motion for attorney fees pursuant to 42 U.S.C.§ 406(b) 22 is GRANTED. The court awards Baird a § 406(b) fee $7,990.39. Afterapplying the $3,990.39 EAJA offset, the Commissioner shall award Baird a total of $4,000.00 and release to Maloney the remainder of his past-due benefits.IT IS SO ORDERED this 3rd day of March, 2016, by United States Magistrate Judge John V. Acosta. (peg)

UNITED STATES DISTRICT COURT
DISTRICT OF OREGON

SEAN T. MALONEY,
Plaintiff,

Case No.: 3:13-CV-00821-AC
OPINION AND ORDER

v.
COMMISSIONER OF SOCIAL
SECURITY ADMINISTRATION
Defendant.
___________________________________
Judge ACOSTA, Magistrate Judge:
Before the court is Sean T. Maloney’s (“Maloney”) Unopposed Motion for Attorney Fees
Under 42 U.S.C. § 406(B), which permits a court to award attorney fees to the attorney of a
successful Social Security claimant, so long as such award is “a reasonable fee for such
representation” and “not in excess of 25 percent of the total of the past-due benefits to which the
claimant is entitled . . . .” 42 U.S.C. § 406(b)(1)(A). Although Maloney is the claimant in this case,
the real party in interest to this motion is his attorney Jeffrey H. Baird (“Baird”) of Dellert Baird
Law Offices, PLLC (“Dellert Baird”). The Commissioner of Social Security (“Commissioner”) does
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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 and the
amount of fees sought, the court concludes the plaintiff’s fee request is reasonable, and the court
grants Maloney’s motion in full.
Procedural Background
Maloney filed applications for supplemental security income and disability insurance
benefits on September 28, 2009, alleging disability beginning January 3, 2007. Maloney v. Astrue,
Case No. 6:13-cv-00821-AC, 2014 WL 3871214, at *1 (D. Or. Aug. 5, 2014). Both applications
were denied initially and upon reconsideration. Id. Maloney’s request for an administrative hearing
was granted, and on July 7, 2011, Administrative Law Judge Laura Valente (“the ALJ”) held a
hearing to determine Maloney’s disability. Id. Subsequently, the ALJ issued her opinion finding
Maloney not disabled. Id. The Appeals Council received additional evidence from Maloney, but
nonetheless denied review, making the ALJ’s opinion the Commissioner’s final decision. Id.
Maloney filed a complaint for review of the Commissioner’s decision in this court on May 15, 2013.
(Dkt. No. 1.)
In his complaint, Maloney alleged that the ALJ erred in the following ways:
1) failing to evaluate the severity and functional impact of all of Maloney’s
impairments before factoring out the limitations arising from his substance abuse; 2)
ignoring the impact of Maloney’s impairments on his functioning in determining his
credibility; and 3) improperly assessing witness’ credibility in light of latersubmitted evidence.
Id. at *6. The Commissioner opposed Maloney’s complaint and argued the ALJ’s decision was free
of error. Id. The Commissioner further argued that any error the ALJ may have committed was
harmless. Id. On August 5, 2014, this court issued an Opinion and Order reversing the ALJ’s

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decision and remanding Maloney’s case for further administrative proceedings. Id. at *12.
Discussion
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 clamant is entitled
by reason of such judgment.” 42 U.S.C. § 406(b)(1)(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 amount of the
smaller of the two payments. Gisbrecht, 535 U.S. at 796.
In his § 406(b) fee petition, Baird seeks a total award of $7,990.39, but a portion of that
amount will be offset by $3,990.39, which the court awarded Baird under the EAJA. Therefore, at
issue on this motion is $4,000.00.
I. Fee Agreement
Under the Supreme Court’s decision in Gisbrecht, the court first examines the contingent fee
agreement to determine whether it is within the statutory twenty-five percent cap. Maloney and
Dellert Baird executed a contingent-fee agreement (the “Fee Agreement”), providing that, upon a
successful recovery, Maloney would pay Baird an amount not to exceed 25% of Maloney’s past-due

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benefit award. In the motion for attorney fees Baird requests the court award $7,990.39. Baird
contends in the fee petition that the requested fee “is less than the amount contemplated in the
agreement and the statutory maximum of 25% of past-due benefits.” (Mot. for Attorney Fees at 4.)
The record does not contain a clear statement of past-due benefits to which Maloney is
entitled. Maloney’s Notice of Award provides that the Commissioner withheld $17,124.25 from his
benefits, but that the Commissioner needed more information from Maloney to conclusively
determine the amount of his past-due benefits. (Mot. for Attorney Fees Ex. 2 at 3.) However, when
a claimant is entitled to past-due benefits, the Commissioner will withhold “up to 25 percent” of
those benefits. Social Security Handbook, § 2019.1, available at https://www.ssa.gov/OP_Home
%2Fhandbook/ handbook.20/handbook-2019.html. From that information, the court can infer that
the $17,124.25 withheld by the Commissioner represents, at a maximum, twenty-five percent of
Maloney’s past-due benefits. The court can further conclude that $7,990.39 fee request is well
below the twenty-five percent fee award contemplated in the fee agreement. Therefore, the court
concludes that Dellert Baird’s request is permissible under the Fee Agreement.
II. Reasonableness
Counsel bears the burden to establish the reasonableness of the 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 court 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 to be considered when evaluating the requested fee’s reasonableness have been identified

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by the Ninth Circuit as derived from the Court’s analysis in Gisbrecht: (1) the character of the
representation, specifically, whether the representation was substandard; (2) the results the
representative achieved; (3) any delay attributable to the attorney seeking the fee; and (4) 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 found appropriate to consider “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 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 section 406(b) fee based solely on the character of Dellert Baird’s
representation.
B. Results Achieved
The court ordered Maloney’s case remanded for additional administrative proceedings.
Thus, although Baird was not successful in arguing for an immediate award of benefits, he achieved
positive results on Maloney’s behalf. Therefore, no reduction under this category is warranted.
C. Undue Delays
A court may reduce a section 406(b) award for delays in proceedings attributable to
claimant’s counsel. Crawford, 586 F.3d at 1151. Baird filed Maloney’s Complaint on May 15,
2013. (Dkt. No. 1.) On November 24, 2013, Baird filed a motion for extension of time to file
Maloney’s opening brief, the only extension filed during the pendency of Maloney’s claim. (Dkt.

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No. 12.) The extension effectively delayed Maloney’s case for only fourteen days and did not
materially increase Maloney’s past-due benefits. (Dkt. No. 13.) Because Baird sought only one
short extension and the effect of the extension on Baird’s recovery is de minimis, no reduction of
Baird’s fee award is warranted because of undue delay.
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 Court explained “[i]f the 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.
Baird requests $7,990.39 for a total of 21.2 hours of work associated with litigating this case
before the district court. This equates to an hourly rate of $376.90. In comparison to Crawford, and
other cases in this district in which fees were awarded under section 406(b), this rate is well within
the reasonable range. See Crawford, 586 F.3d at 1151 (reversing the district court in three
consolidated California cases and granting claimants’ requests for fees that resulted in hourly rates
of $875 (amounting to seventeen percent of past-due benefits), $519.19 (amounting to fifteen
percent of past-due benefits), and $813.56 (amounting to fourteen percent of past-due benefits)); see
Albert v. Astrue, Civil No. 05-890-AC, 2011 WL 2116987, at *4 (D. Or. Apr. 28, 2011), adopted
by Albert v. Astrue, 2011 Wl 2115552, at *1 (granting claimant’s request for twenty percent of pastdue benefits which amounted to 33.55 hours at rate of $536.51); see Dunnigan, 2009 WL 6067058,
at *7 (awarding reduced fee award at the hourly rate of $291.10, amounting to twelve and a half
percent of past-due benefits). Thus, on its face, the hourly rate of $376.90 is well within the bounds
of reasonableness, and the court concludes an award of $7,990.39 would be proportional to the work

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Baird performed and the result he achieved for his client.
E. Risk
Baird does not articulate any risks inherent in taking Maloney’s case. However, because
Baird’s fee request is proportional to the results achieved and work performed, and is well below
the twenty-five percent threshold agreed upon in the fee agreement, the court concludes that the fee
award should not be reduced for lack of risk. Therefore, the court will award Baird the full request
of $7,990.39.
Conclusion
For the aforementioned reasons, Plaintiff’s motion for attorney fees pursuant to 42 U.S.C.
§ 406(b) (Dkt. No. 22) is GRANTED. The court awards Baird a § 406(b) fee $7,990.39. After
applying the $3,990.39 EAJA offset, the Commissioner shall award Baird a total of $4,000.00 and
release to Maloney the remainder of his past-due benefits.
IT IS SO ORDERED
Dated this 3rd day of March, 2016.
/s/ John V. Acosta
JOHN V. ACOSTA
United States Magistrate Judge

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