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Gonzalez v. Berryhill

United States District Court, C.D. California

June 26, 2017

LISA RENE GONZALEZ, Plaintiff,
v.
NANCY A. BERRYHILL[1], Acting Commissioner of Social Security, Defendant.

          ORDER GRANTING MOTION FOR ATTORNEY FEES PURSUANT TO 42 U.S.C. § 406(B)

          HONORABLE KENLY KIYA KATO United States Magistrate Judge.

         I. INTRODUCTION

         Plaintiff Lisa Rene Gonzalez's (“Plaintiff's”) counsel, Erika Bailey Drake of Drake & Drake, P.C. (“Counsel”), filed a Motion for Attorney's Fees Pursuant to 42 U.S.C. § 406(b) (“Motion”). The Motion seeks an award in the amount of $8, 186.25 for representing Plaintiff in an action to obtain disability insurance benefits with a refund to Plaintiff of $3, 000 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 28 U.S.C. § 636(c). For the reasons stated below, the Court grants the Motion.

         II. RELEVANT BACKGROUND

         On October 20, 2014, Plaintiff filed the Complaint in this action. See ECF Docket No. (“Dkt.”) 3, Compl. Plaintiff alleged defendant Carolyn W. Colvin (“Defendant”) improperly denied Plaintiff's applications for disability insurance benefits and supplemental social security income. Id. at 2. On July 20, 2015, the Court found Defendant erred in denying Plaintiff's applications, and entered Judgement reversing and remanding the case to Defendant for further administrative proceedings. Dkt. 17, Judgment.

         On September 2, 2015, the Court issued an order approving the Parties' stipulation for award of EAJA fees to Counsel in the amount of $3, 000. Dkt. 19, Order Granting EAJA Fees.

         On June 2, 2017, pursuant to 42 U.S.C. § 406(b), Counsel filed the instant Motion seeking the amount of $8, 186.25 for representing Plaintiff in the underlying proceedings before the Court. Dkt. 20, Mot. at 1. Additionally, Counsel intends to “refund to [P]laintiff EAJA fees previously awarded in the amount of $3, 000.” Id. Accordingly, Counsel seeks a net fee of $5, 186.25. Id. Counsel states 16.2 hours of attorney time were expended on Plaintiff's case, Exhibit Time Sheet, Dkt. 20, Ex. 3, and seeks compensation pursuant to a contingency fee agreement stating “client will pay representative a fee equal to the lesser of 25% of Client's past-due benefits” resulting from a favorable decision by the Appeals Council. Contingency Fee Agreement, Dkt. 20, Ex. 2.

         On June 2, 2017, Plaintiff was served with the Motion and informed she had a right to file a response to the Motion. Mot. at 2, 9. Plaintiff failed to file a timely response and Defendant failed to file a timely opposition. Thus, the Court deems this matter submitted.

         III. DISCUSSION

         A. APPLICABLE LAW

         42 U.S.C. § 406(b) (“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, 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 ...

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