United States District Court, N.D. California
ORDER GRANTING PLAINTIFF'S COUNSEL'S MOTION
FOR ATTORNEYS' FEES RE: DKT. NO. 31
C. SPERO, Chief Magistrate Judge
Michael Allen Hatfield initiated this action to seek review
of the final decision by the Commissioner of the Social
Security Administration (“the Commissioner”)
denying his application for disability insurance and
Supplemental Security Income (“SSI”) benefits
under Title II of the Social Security Act
(“SSA”). On July 6, 2015, the Court reversed the
Commissioner's decision and remanded for an award of
benefits. See S.J. Order (dkt. 22). On remand, the
Commissioner granted Plaintiff's application for
benefits, entitling him to receive $48, 400 in past due
benefits. See Cho Decl. (dkt. 31) Ex. 2.
Plaintiff's counsel, the Law Offices of Lawrence D.
Rohlfing (the “Law Firm” or “Firm”),
represented Plaintiff for proceedings in this Court and under
a contingency fee agreement (the “Fee
Agreement”). Cho Decl. Ex. 1. Counsel now brings a
Motion for Attorney Fees pursuant to 42 U.S.C. § 406(b),
seeking an award of $12, 100 in attorneys' fees for work
performed before this Court. See generally Mot.
(dkt. 31). The parties have consented to the jurisdiction of
a United States Magistrate Judge pursuant to 28 U.S.C. §
636(c). For the reasons stated below, the motion is GRANTED.
16, 2014, Plaintiff entered into a contingency-based fee
agreement with the Firm, appointing the Firm as his counsel
in connection with his ongoing claim for disability benefits
following denial at the administrative level. Cho Decl. Ex.
1. In relevant part, the Fee Agreement provides
Plaintiff's Counsel with “25% of the backpay
awarded upon reversal of any unfavorable ALJ decision for
work before the court, ” as well as assigning to the
Firm any fees awarded under the Equal Access to Justice Act
(“EAJA”). Id. On July 6, 2015, this
Court ruled in favor of Plaintiff on summary judgment,
reversing the ALJ's denial of benefits and remanding for
a calculation and award of benefits consistent with the
order. See S.J. Order. Following judgment, the Court
denied a motion by the Commissioner to alter the Court's
order, leaving the Court's prior judgment standing. Dkt.
On July 19, 2016, this Court signed a stipulation awarding
Plaintiff's counsel $6000.00 in attorneys' fees under
the EAJA. EAJA Award (dkt. 30). On March 5, 2017, the Social
Security Administration issued Plaintiff an award letter for
benefits wherein it indicated it was withholding $12, 101-25%
of the total past due award-pending the Court's
determination of attorneys' fees. Cho Decl. Ex. 2.
present motion, Plaintiff's counsel asks the Court to
direct the Social Security Commissioner to pay
Plaintiff's counsel the fee of $12, 100 for work
performed before this Court with a credit to Plaintiff for
the $6000 already paid. Mot. at 1. Plaintiff's counsel
contends this fee is reasonable because “[t]otal fees
from all sources will not exceed 25% of past due benefits
considering both the lack of any administrative and the
complete court fees sought.” Mot. at 7. Because
Plaintiff's counsel agreed to a reasonable fee agreement,
provided efficient and effective legal assistance, and did
not work at an hourly rate that amounts to a windfall,
Plaintiff's counsel contends the sought fee is
reasonable. Mot. at 4-7. Plaintiff's counsel emphasizes
that it did not perform in a substandard manner, create
excessive delay, and did not have an excessively large
contingency-fee agreement to warrant lowering the fee award.
Mot. at 4 (referencing factors discussed in Crawford v.
Astrue, 586 F.3d 1142, 1152 (9th Cir. 2009)).
Plaintiff's counsel also notes that the net cost of the
§ 406(b) fees to Plaintiff would be lessened by $6, 000
after the previously awarded EAJA fees are properly refunded
to Plaintiff. Mot. at 7.
response to the Motion, the Commissioner filed a Statement of
Defendant's Non-Party Analysis, wherein it indicated that
the $12, 100 sought by Plaintiff's counsel appears to
equal 25% of the total past due amount, and that when the
Court analyzes the reasonableness of these fees, the Court
should “look first to the fee agreement, then test it
for reasonableness by examining ‘whether the amount
need be reduced, not whether the lodestar amount should be
enhanced.'” Comm'r's Statement (dkt. 32) at
3 (quoting Crawford, 586 F.3d at 1149). The
Commissioner ultimately took “no position on the
reasonableness of the request, ” but did note that an
EAJA refund to Plaintiff would be required if the Court
awards Plaintiff's counsel § 406(b) fees.
Comm'r's Statement at 4-5.
14, 2017, Plaintiff's counsel mailed a copy of the motion
to Plaintiff. Mot. at 11. Plaintiff has not responded or
objected to the current motion.
scheme established by Congress for attorney fee awards in
cases involving social security claims is described by the
Supreme Court as follows:
Fees for representation of individuals claiming Social
Security old-age, survivor, or disability benefits, both at
the administrative level and in court, are governed by
prescriptions Congress originated in 1965. Social Security
Amendments of 1965, 79 Stat. 403, as amended, 42 U.S.C.
§ 406. . . . The statute deals with the administrative
and judicial review stages discretely: § 406(a) governs
fees for representation in administrative proceedings; §
406(b) controls fees for representation in court. See
also 20 CFR § 404.1728(a) (2001).
Gisbrecht v. Barnhart, 535 U.S. 789, 793-94 (2001).
42 U.S.C. § 406(b) provides, in relevant part, that
“[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, 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).
Gisbrecht, courts should “approach fee
determinations [under § 406(b)] by looking first to the
contingent-fee agreement, then testing it for reasonableness,
” and may reduce the recovery “based on the
character of the representation and the results the
representative achieved.” Gisbrecht, 535 U.S.
at 808. The Ninth Circuit has applied Gisbrecht to
mean that “court[s] may properly reduce the fee for
substandard performance, delay, or benefits that are not in
proportion to the time spent on the case.”
Crawford, 586 F.3d at 1151 (citing
Gisbrecht 535 U.S. at 808). In this analysis, courts
“generally have been deferential to the terms of the
contingency fee contracts in subsection 406(b) cases,
accepting that the resulting de facto hourly rates
may exceed those for non contingency-fee arrangements,
” because “basing a reasonableness determination
on a simple hourly rate basis is inappropriate when an
attorney is working pursuant to a reasonable contingency
contract for which there runs a substantial risk of
loss.” Hearn v. Barnhart, 262 F.Supp.2d 1033,
1037 (N.D. Cal. 2003). Further, the Ninth Circuit has held
that the 25% cap applies only to fees awarded under 42 U.S.C.
§ 406(b) and does not apply to the total fees
awarded under subsections (a) and (b) combined, which may
exceed 25% of the award of benefits. Clark v.
Astrue, 529 F.3d 1211, 1218 (9th Cir. 2008).
addition to the fees permitted under § 406(a) and (b),
the Equal Access to Justice Act (“EAJA”), enacted
in 1980, allows a party who prevails against the United
States in court, including a successful Social Security
benefits claimant, to receive an award of fees payable by the
United States if the Government's position in the
litigation was not “substantially justified.”
Gisbrecht, 535 U.S. at 796 (citing 28 U.S.C. §
2412(d)(1)(A)). In contrast to fees awarded under 42 U.S.C.
§ 406(b), EAJA fees are based on the “time
expended” and the attorney's “[hourly]
rate.” 28 U.S.C. § 2412(d)(1)(B). In
Gisbrecht, the Supreme Court explained that
“Congress harmonized fees payable by the Government
under EAJA with fees payable under § 406(b) out of the
claimant's past-due Social Security benefits in this
manner: Fee awards may be made under both prescriptions, but
the claimant's attorney must refun[d] to the claimant the
amount of the smaller fee.'” Gisbrecht,
535 U.S. at 796 (citing Act of ...