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Buchanan v. Astrue

January 15, 2009


The opinion of the court was delivered by: Andrew J. Wistrich United States Magistrate Judge


Plaintiff's counsel Brian C. Shapiro ("petitioner") has filed a petition for attorney's fees under 42 U.S.C. § 406(b) (the "Petition") in the total amount of $23,000, with a credit of $7,638.27 for fees previously paid to petitioner under the Equal Access to Justice Act ("EAJA"). Defendant filed a response to the petition discussing the principles for determining a "reasonable" fee, but because he is not a party to the fee agreement between plaintiff and petitioner, he has not taken a formal position assenting to or opposing the fee petition. Instead, defendant has analyzed petitioner's fee request and has identified factors that may be relevant in assessing petitioner's fee request.


Plaintiff initially filed an application for benefits on September 17, 2001 alleging that she had been disabled since March 17, 1999 due to musculoskeletal impairments and diabetes mellitus. [Administrative Record ("AR") 25]. The Administrative Law Judge (the "ALJ") denied her application on February 19, 2003 [AR 25] and the Appeals Council denied review. [AR 4-6]. Plaintiff then sought judicial review of the ALJ's February 2003 decision. [See Rhonda Buchanan v. Jo Anne B. Barnhart, CV-00978 AJW ("Buchanan I")]. On September 29, 2004, this court held that the ALJ committed reversible legal error and remanded the case for further administrative proceedings "for the purpose of determining the duration of plaintiff's disability and a corresponding award of benefits." [AR 362].

On remand, the Appeals Council issued an order vacating the ALJ's February 2003 decision and remanded the case to the same ALJ "for further proceedings consistent with the order of the court." [AR 366]. However, in the ALJ's written decision dated June 7, 2005, he did not determine "the duration of plaintiff's disability" as instructed by the court, and he again denied benefits. Plaintiff again sought judicial review by filing this action. On January 4, 2007, judgment was entered reversing and remanding this case for an award of benefits.

On remand, plaintiff was awarded social security disability insurance benefits, including a past-due benefits award in the amount of approximately $95,000. [Petition 3, 21 & Ex. 2]. Plaintiff's counsel has been awarded the stipulated sum of $7,638.27 in total for attorney's fees pursuant to the Equal Access to Justice Act ("EAJA"), 24 U.S.C. § 2412(d)*fn1 in Buchanan I and This case .


Section 406(b) provides, in part:

Whenever 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, and the Commissioner of Social Security may . . . certify the amount of such fee for payment to such attorney out of, and not in addition to, the amount of such past-due benefits.

42 U.S.C. § 406(b)(1)(A). Thus, "a prevailing [disability] claimant's [attorney's] fees are payable only out of the benefits recovered; in amount, such fees may not exceed 25 percent of past-due benefits." Gisbrecht v. Barnhart, 535 U.S. 789, 792 (2002). In Gisbrecht, the Supreme Court explained that where the plaintiff has entered into a contingent fee agreement with counsel, section 406(b) is meant "to control, not to displace, fee agreements between Social Security benefits claimants and their counsel." Gisbrecht, 535 U.S. at 793. The Supreme Court held that where the claimant and counsel had entered into a lawful contingent fee agreement, courts that used the "lodestar" method as the starting point to determine the reasonableness of fees requested under section 406(b) improperly "reject[ed] the primacy of lawful attorney-client fee agreements." Gisbrecht, 535 U.S. at 793.

While courts review fee agreements as an "independent check, to assure that they yield reasonable results in particular cases," lawful contingent-fee agreements are "the primary means by which fees are set" for the successful representation of social security disability claimants in court. Gisbrecht, 535 U.S. at 807 (emphasis added). Gisbrecht provided some examples of instances in which a downward adjustment of the agreed contingent fee might be in order. Gisbrecht, 535 U.S. at 807-808. The Supreme Court left to the district courts, however, the task of how best to determine whether enforcement of a contingent fee agreement is reasonable in a particular case. See Gisbrecht, 535 U.S. at 808 ("Judges of our district courts are accustomed to making reasonableness determinations in a wide variety of contexts, and their assessments in such matters, in the event of an appeal, ordinarily qualify for highly respectful review."); see Crawford v. Astrue, 545 F.3d 854, 862 (9th Cir. 2008)("The methodology by which a district [court] makes such reasonableness determinations is for that court to select in the exercise of its sound discretion.").

Plaintiff retained petitioner to represent her both in this action for judicial review of defendant's decision denying his application for disability benefits and Buchanan I. Plaintiff agreed to pay petitioner "25% of the backpay awarded upon reversal of any unfavorable ALJ decision for work before the court." [Petition 21 & Ex. 1]. Under Gisbrecht, the court examines plaintiff's contingent fee agreement with petitioner only to assure that the enforcement of that agreement is reasonable. See Thomas v. Barnhart, 412 F.Supp.2d 1240, 1244 (M.D. Ala. 2005) (observing that "the hurdle Gisbrecht erects for the claimant's attorney is rather low, and a change to the [fee] agreement is warranted at least, and perhaps at most, when justice requires"). The court may consider factors such as the character of the representation, the results achieved, the ratio between the amount of any benefits award and the time expended, any undue delay attributable to counsel that caused an accumulation of back benefits, and whether the requested fee award would constitute a "windfall" to the attorney. See Gisbrecht, 535 U.S. at 808; see also Hearn v. Barnhart, 262 F. Supp. 2d 1033, 1037 (N.D. Cal. 2003) (awarding section 406(b) fees post-Gisbrecht where (1) counsel sought less than the maximum 25% contingent fee allowed by law; (2) counsel "faced a substantial risk of loss" because the plaintiff alleged a variety of impairments that "were not susceptible to clear and straightforward forms of proof, and some of which involved lengthy and complicated medical histories"; (3) "Congress has indicated the permissibility, within limits, of rewarding attorneys for assuming the risk of going uncompensated for representing Social Security claimants"; (4) the value of the benefits award to the plaintiff was "substantially more than the past-due benefits on which the fee is based" because the plaintiff also received ongoing disability benefits; (5) counsel devoted "considerable time and careful attention" to the case; and (6) "[p]petitioner's challenge to the ALJ's determination at step five was central to the court's decision to remand the case to the Commissioner") (citations omitted).

In this case, several relevant factors weigh in favor of granting petitioner's fee request. First, petitioner obtained favorable outcomes for plaintiff in two actions for judicial review, first by securing a remand for further proceedings, and second by obtaining a remand for an award of benefits, resulting in a very sizeable award of past-due benefits as well as ongoing disability insurance benefits. [Petition 21 & Ex. 2].

Second, petitioner's requested section 406(b) fee of $23,000 is slightly below the maximum 25% contingent fee authorized by law and by petitioner's contingent fee agreement ...

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