Gumm v. Colvin

          ORDER GRANTING MOTION FOR ATTORNEY FEES PURSUANT TO 42 U.S.C. § 1383(D)(2)(B)

          HONORABLE KENLY KIYA KATO UNITED STATES MAGISTRATE JUDGE

         I. INTRODUCTION

         Plaintiff Dana D. Gumm’s (“Plaintiff’s”) counsel, Cyrus Safa of Law Offices of Lawrence D. Rohlfing (“Counsel”), filed a Motion for Attorney Fees Pursuant to Title 42 of the United States Code, section 1383(d)(2)(B) (“Motion”). The Motion seeks an award in the amount of $5, 800.00 for representing Plaintiff in an action to obtain supplemental security income (“SSI”) benefits, with no refund to Plaintiff for the Equal Access to Justice Act (“EAJA”) fees previously awarded. The parties have consented to the jurisdiction of the undersigned United States Magistrate Judge, pursuant to Title 28 of the United States Code, section 636(c). For the reasons stated below, the Court grants the Motion.

         II. RELEVANT BACKGROUND

         On June 30, 2013, Plaintiff filed the complaint in this action. See ECF Docket No. (“Dkt.”) 3, Compl. Plaintiff alleged defendant Carolyn W. Colvin (“Defendant”) had improperly denied Plaintiff’s SSI application. Id. On January 23, 2015, the Court found Defendant erred in denying Plaintiff’s SSI application, and entered Judgment reversing and remanding the case to Defendant for further administrative proceedings. Dkt. 20, Judgment. On June 1, 2016, Defendant awarded Plaintiff SSI benefits. Dkt. 23-3, Notice of Award.^[1]

         On April 10, 2015, the Court awarded Counsel EAJA fees in the amount of $2, 300.00. Dkt. 22, Order Granting EAJA Fees.

         On July 13, 2016, pursuant to Title 42 of the United States Code, section 1383(d)(2)(B), Counsel filed the instant Motion seeking the amount of $5, 800.00 for representing Plaintiff in the underlying proceedings before the Court. Dkt. 23, Mot. Counsel states he will not reimburse Plaintiff for the EAJA award because “the United States Department of Treasury applied all of the EAJA fee to a government debt” Plaintiff owed.^[2] Id. at 3-4. Counsel also states 23.5 hours of attorney and paralegal time were expended on Plaintiff’s case, Dkt. 23-4, Itemized Hours, and seeks compensation pursuant to a contingency fee agreement stating Counsel would receive “25% of the backpay awarded upon reversal of an unfavorable ALJ decision, ” Dkt. 23-1, Social Security Representation Agreement. On July 13, 2016, Plaintiff was served with the Motion and informed she had a right to file a response to the Motion. Dkt. 23, Mot. at 2, 10. However, Plaintiff failed to file a timely response. On July 19, 2016, Defendant filed a Non-Opposition to the Motion stating she “takes no position on the reasonableness of the [Motion’s] request.” Dkt. 27, Non-Opposition at 6. Thus, the Court deems this matter submitted.

         III. DISCUSSION

         A. APPLICABLE LAW

         Title 42 of the United States Code, section 1383(d)(2) (“Section 1383(d)(2)”) permits an attorney fee for SSI benefits awarded “to the same extent” permitted by Title 42 of the United States Code, section 406(b) (“Section 406(b)”). 42 U.S.C. § 1383(d)(2)(A). Thus, the Court analyzes the Motion as if it were a request for Section 406(b) fees. Section 406(b) provides:

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.

Id. § 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, 122 S.Ct. 1817, 152 L.Ed.2d 996 (2002).

         Where a claimant entered into a contingent fee agreement with counsel, a court must apply Section 406(b) “to control, not to displace, fee agreements between Social Security benefits claimants and their counsel.” Id. at 793. A court should not use a “lodestar method, ” under which a district court “determines a reasonable fee by multiplying the reasonable hourly rate by the number of hours reasonably expended on the case.” Crawford v. Astrue, 586 F.3d 1142, 1148 (9th Cir. 2009) (en banc) (citation omitted). Rather, where the claimant and counsel entered into a lawful contingent fee agreement, courts that use the “lodestar” method as the starting point to determine the reasonableness of fees requested under Section 406(b) improperly “reject the primacy of lawful attorney-client fee agreements.” Gisbrecht, 535 U.S. at 793. Thus, courts should not apply lodestar rules in cases where the claimant and counsel reached a contingent fee agreement because:

[t]he lodestar method under-compensates attorneys for the risk they assume in representing [social security] claimants and ordinarily produces remarkably smaller fees than would be produced by starting with the contingent-fee agreement. A district court’s use of the lodestar to determine a reasonable fee thus ultimately works to the disadvantage of [social security] ...