Opinion
No. 3:15-cv-01379-CL
08-22-2018
KIMBERLY ANN GRECCO, Plaintiff, v. COMMISSIONER, SOCIAL SECURITY ADMINISTRATION, Defendant.
REPORT AND RECOMMENDATION
This case comes before the Court on an unopposed motion (#32) for attorney fees under 42 U.S.C. § 406(b) in the amount of $15,748.25, with the actual payment request of $6,248.25, the amount left after subtracting the $9,500.00 in EAJA fees that have already been paid to the plaintiff's attorney. Having reviewed the proceedings and the amount of fees sought, the Court concludes that the plaintiff's attorney is entitled to the fees requested. The motion (#32) should be GRANTED.
PROCEDURAL BACKGROUND
On July 23, 2015, the plaintiff filed her claim to obtain judicial review of a final decision of the Commissioner, which denied her application for Title XVI supplemental security income disability benefits under the Social Security Act. On November 3, 2016, this Court issued a Report and Recommendation (#23) recommending the case be reversed and remanded to the Commissioner of Social Security for further proceedings. On December 13, 2016, Judge Aiken issued an Order (#25) adopting the Report in full; the Court then entered a judgment (#26) reversing and remanding the case for further proceedings. On May 19, 2017, this Court granted a stipulated application for the plaintiff's attorney fees pursuant to EAJA in the amount of $9,500.00 (#28); the fees were assigned and made payable to the plaintiff's counsel. On June 11, 2018, the plaintiff's attorney filed a motion for extension of time to file application for fees pursuant to 42 U.S.C. § 406(b) (#30); this Court granted the motion for extension on June 12, 2018 (#31). On June 21, 2018, plaintiff's attorney filed this motion for attorney fees under 42 U.S.C. § 406(b).
DISCUSSION
Under 42 U.S.C. § 406(b), a court entering judgment in favor of an SSDI claimant who was represented by an attorney "may determine and allow as part of its 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." Crawford v. Astrue, 586 F.3d 1142, 1147 (9th Cir. 2009). In contrast to fees awarded under fee-shifting provisions such as 42 U.S.C. § 1988, the fee is paid by the claimant out of the past-due benefits awarded; the losing party is not responsible for payment. Gisbrecht v. Barnhart, 535 U.S. 789, 802 (2002). Also, in contrast to fees awarded under fee-shifting statutes, under which "nothing prevents the attorney for the prevailing party from gaining additional fees, pursuant to contract, from his own client," id. at 806, the court-awarded fee is the only way a successful SSDI attorney may recover fees for work performed before the district court. Crawford, 586 F.3d at 1147. In fact, it is a criminal offense for an attorney to collect fees in excess of those allowed by the court. Id.; 42 U.S.C. § 406(b)(2); see also Gisbrecht, 535 U.S. at 806-07. Thus, when a court approves both an EAJA fee and a section 406(b) fee payment, the claimant's attorney must offset any fees the attorney receives under Section 406(b) with any award the attorney received under EAJA "if the two were for the 'same work.'" Parrish v. Commissioner of Social Sec. Admin., 698 F.3d 1215, 1218 (9th Cir. 2012) (citing Gisbrecht, 535 U.S. at 796).
Under the Supreme Court's decision in Gisbrecht, the court first examines the contingency fee agreement to determine whether it is within the statutory 25% cap. In this case, the plaintiff's counsel submitted the attorney-client contingent-fee agreement (#32-4); the agreement shows federal court appearance, followed by a favorable outcome, will result in a fee of either "25% of the past-due benefits resulting from my claim or claims," or, if the amount is greater, the sum that the plaintiff "is able to obtain pursuant to the Equal Access to Justice Act." Thus, the terms of the agreement are within the statute's limits.
Such a provision is permissible, as "fee awards may be made under both [EAJA and 406(b)], but the claimant's attorney must refund to the claimant the amount of the smaller fee." Gisbrecht, 535 U.S. at 796 (internal citations and quotations omitted).
The next step is to confirm that counsel's fee request does not exceed the statute's 25% ceiling. This determination requires evidence of the retroactive benefits to be paid to the claimant. Counsel has included the "Notice of Award," from the Society Security Administration (#32-3). The Notice of Award does not provide the total retroactive benefits due to the plaintiff, but the total can be calculated from the dates and corresponding monthly benefit amounts listed. See id. at 1. Using the amounts listed there, the total of retroactive benefits due to the plaintiff is $62,993.00. Twenty-five percent of $62,993.00 is $15,748.25; this corresponds exactly with page 4 of the Notice of Award, which states, "[w]e cannot withhold more than 25 percent of past-due benefits to pay an authorized fee. We withheld $15,748.25 from your past-due benefits to pay the representative." Therefore, it is clear that the requested fee of $15,748.25 is exactly equal to the 25% statutory limit.
An order for an award of benefits cannot be presumed to require a fee award of 25% of a claimant's retroactive benefits award, however, nor should the order for an award be viewed in isolation. Newton v. Colvin, 2013 WL 3119564 (D. Or. June 18, 2013). 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, 586 F.3d at 1151 (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 as derived from the Supreme Court's analysis in Gisbrecht:
1. the character of the representation, specifically, whether the representation was substandard;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 court 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.
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.
Character of representation. Substandard performance by a legal representative may warrant a reduction in a § 406(b) fee award. Id. at 1151. There is nothing in the record in this case that would provide a basis for reduction in fee due to the character of counsel's representation.
Results achieved. In this case, counsel achieved a remand for further administrative proceedings and eventual payment of benefits. These are clearly positive and successful results. Thus, the record provides no basis for a reduction in fee due to the character of counsel's representation and the results achieved.
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. The reduction is appropriate "so that the attorney will not profit from the accumulation of benefits during the pendency of the case in court." Gisbrecht, 535 U.S. at 808 (citation omitted). In this case, plaintiff's counsel requested two extensions of time. The court granted plaintiff's counsel an unopposed extension of thirty days to file the opening brief and an unopposed extension of fourteen days to file the present motion. No evidence in the record suggests that either request was intended to delay the proceedings in this case. Accordingly, reduction under this factor is not warranted.
Proportionality of benefits to time spent on case. 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. Here, counsel submitted timesheets representing counsel spent a total of roughly 90 hours working on the plaintiff's case. Counsel has requested a total fee of $15,748.25, which would result in an effective hourly rate of approximately $175 per hour. This rate is well below counsel's normal hourly billing rate of $350.00 for non-contingent cases, as well as the hourly non-contingent billing rate charged by attorneys in Oregon, who, like counsel, have over 30 years of experience. See Mem. Supp. Mot. Att'y Fees (#33); Oregon State Bar, 2017 Economic Survey, https://www.osbar.org/_docs/resources/Econsurveys/ 17EconomicSurvey.pdf (last visited Aug. 20, 2018). The amount is, therefore, clearly proportional and reasonable for the benefits ultimately awarded, and does not represent a windfall for plaintiff's counsel.
RECOMMENDATION
Based on the foregoing analysis, the Motion for Attorney Fees (#32) should be GRANTED. Counsel should be awarded $6,248.25 under Section 406(b), the amount left after subtracting the $9,500.00 in EAJA fees that have already been paid to counsel.
This Report and Recommendation will be referred to a district judge. Objections, if any, are due no later than fourteen (14) days after the date this recommendation is filed. If objections are filed, any response is due within fourteen (14) days after the date the objections are filed. See FED. R. CIV. P. 72, 6.
Parties are advised that the failure to file objections within the specified time may waive the right to appeal the District Court's order. Martinez v. Ylst, 951 F.2d 1153 (9th Cir. 1991).
DATED this 22 day of August, 2018.
/s/_________
MARK D. CLARKE
United States Magistrate Judge