United States District Court, D. Arizona
BERNARDO P. VELASCO UNITED STATES MAGISTRATE JUDGE.
before the Court is “Plaintiff's Motion and Notice
of Motion for Approval of Attorney's Fees under 42 U.S.C.
Â§406(b) of the Social Security Act”, with accompanying
memorandum and exhibits. (Doc. 22). Defendant has filed a
Response (Doc. 24). For the following reasons, the Court
grants Plaintiff's Motion.
filed this action in June 2014, seeking review of the denial
of her application for supplemental security income under the
Social Security Act. (Doc. 1). Thereafter, upon consideration
of the parties' briefs, the Court reversed the
Commissioner's decision denying benefits and remanded the
matter for additional proceedings before the Administrative
Law Judge. (Doc. 18); see also Doc. 19 (Judgment)).
Upon remand, Plaintiff was granted disability benefits.
(See Memorandum (Doc. 22-2) at 3; Counsel's
Declaration (Doc. 22-3) at ¶8; Doc. 22-5).
now seeks attorney's fees in the amount of $10, 700.00
pursuant to 42 U.S.C. Â§406(b). Plaintiff acknowledges that
the Court has previously awarded her $4, 200.00 in
attorney's fees pursuant to the Equal Access to Justice
Act (“EAJA”), 28 U.S.C. § 2412(d). (Doc.
22-2 at 5). Plaintiff's counsel, Tye Smith, states in his
declaration that “the $10, 700.00 herein sought would
then be immediately reduced by $4, 200.00, the amount that
has already been awarded under the EAJA.” (Doc. 22-3 at
“has found no basis to object” to
Plaintiff's Motion, and defers to the Court's
judgment on this matter. (Doc. 24 at 1).
406 sets forth “the exclusive regime for obtaining fees
for successful representation of Social Security benefits
claimants.” Gisbrecht v. Barnhart, 535 U.S.
789, 795-96 (2002). Section 406(b), “controls fees for
representation…” before the court. Id.
at 794. Pursuant to '40b(b), “[w]henever a court
renders a judgment favorable to a claimant under this
subchapter who was represented before the court by an
attorney, the court 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[.]” 42 U.S.C. § 406(b)(1)(A).
record reflects that Plaintiff entered into a contingent-fee
agreement wherein she agreed to pay attorney's fees not
to exceed 25% of past-due benefits in the event that the
district court, on appeal, remanded her action for additional
administrative review and she was awarded past-due benefits
on remand. (Doc. 22-7). The Supreme Court, when discussing
the term “reasonable fee” as used in '406(b),
concluded that “§406(b) does not displace
contingent-fee agreements as the primary means by which fees
are set for successfully representing Social Security
benefits claimants in court. Rather, §406(b) calls for
court review of such arrangements as an independent check, to
assure that they yield reasonable results in particular
cases.” Gisbrecht, 535 U.S. at 807 (footnote
omitted). The Court also pointed out that “Congress has
provided one boundary line: Agreements are unenforceable to
the extent that they provide for fees exceeding 25 percent of
the past-due benefits.” Id. (citing 42 U.S.C.
§ 406(b)(1)(A)) (footnote omitted). In assessing
reasonableness of the fee sought, district courts should
consider the results achieved and may properly apply a
reduction if the attorney provided substandard representation
or engaged in dilatory conduct in order to increase the
accrued amount of past-due benefits, or if the benefits are
out of proportion to the time spent on the case, thereby
resulting in a windfall to counsel. Crawford v.
Astrue, 586 F.3d 1142, 1148, 1151 (9th Cir.
2009) (citing Gisbrecht, 535 U.S. at 808). In making
its assessment, the district court may consider the lodestar
calculation as an aid, if necessary. Id. The
attorney bears the burden of establishing that the fee sought
is reasonable. Id. at 1148 (citing
Gisbrecht, 535 U.S. at 807).
applying Gisbrecht, the Ninth Circuit has emphasized
that district courts “must respect ‘the primacy
of lawful attorney-client fee agreements, …looking
first to the contingent-fee agreement, then testing it for
reasonableness.'” Crawford, 586 F.3d at
1148 (quoting Gisbrecht, 535 U.S. at 793, 808).
Here, the fee agreement between Plaintiff and counsel
provided for a 25% contingency fee consistent with
Gisbrecht. Notification from the Social Security
Administration indicated that 25% of the past-due award,
amounting to $15, 888.00, was withheld from Plaintiff's
past-due benefits for payment of attorney's fees. (Doc.
22-4 at 1). Thus, it appears that the approximate award of
past-due benefits amounts to $63, 552.00. However, counsel
here does not seek the full amount allowed pursuant to the
agreement and statute but, instead, requests $10, 700.00,
which is approximately 17% of the award.
regard to the reasonableness of the fees sought,
Plaintiff's counsel has submitted time records indicating
that he spent 24 hours working on Plaintiff's case before
this Court, which results in an effective hourly rate of
$445.83. (Doc. 22-6). On the instant record, there is no
indication of any substandard performance by Plaintiff's
counsel or that he engaged in any unreasonable delay given
that Plaintiff's opening brief was filed on time, and
counsel requested no extensions. Instead, counsel achieved a
favorable result for Plaintiff and should be compensated to
recognize the risks attendant to contingent fee litigation.
Further, “[i]n cases of this type, the Ninth Circuit
sitting en banc has approved effective hourly rates
of $519, $875, and $902 without finding that they are
unreasonable.” Young v. Colvin, 2014 WL
590335, *1 (D. Ariz. Feb. 14, 2014) (citing
Crawford, 586 F.3d at 1153). Thus, upon
consideration of the Gisbrecht reasonableness
factors, the Court concludes that the requested fee award is
reasonable. However, Mr. Smith must refund to Plaintiff the
lesser of the fee awarded under 42 U.S.C.
§ 406(b) and the fee awarded under the
EAJA. See Gisbrecht, 535 U.S. at 796.
foregoing reasons, IT IS ORDERED that “Plaintiff's
Motion and Notice of Motion for Approval of Attorney's
Fees under 42 U.S.C. §406(b) of the Social Security
Act” (Doc. 22), is GRANTED and the Court hereby AWARDS
Plaintiffs counsel $10, 700.00 in attorney's fees
pursuant to 42 U.S.C. § 406(b).
FURTHER ORDERED that Plaintiffs counsel shall refund to
Plaintiff the lesser of the fee awarded pursuant to 42 U.S.C.
§ 406(b) and the fees previously