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Wares v. Saul

United States District Court, E.D. California

September 11, 2019

ANDREW SAUL, Commissioner of Social Security, Defendant.


         On July 9, 2019, Plaintiff's counsel, Shellie Lott, filed a motion for an award of attorney's fees pursuant to 42 U.S.C. § 406(b). (ECF No. 21.) Plaintiff and Defendant were served with a copy of the motion. (ECF No. 22.) Defendant filed a response to the motion in which Defendant does not take a position on the reasonableness of the request for attorney's fees. (ECF No. 23.) Plaintiff has not filed an objection or other response to the motion.

         For the reasons set forth below, the motion for an award of attorney's fees is GRANTED in the amount of $15, 522, subject to an offset of $ 5, 225 in fees already awarded pursuant to the Equal Access to Justice Act (“EAJA”) on December 12, 2016. (See ECF No. 20.)

         I. BACKGROUND

         Plaintiff brought the underlying action seeking judicial review of a final administrative decision denying her claim for disability insurance benefits and supplemental security income under the Social Security Act. (ECF No. 1.) On September 16, 2016, the Court ordered the case remanded to the agency for further proceedings. (ECF No. 17.) On September 16, 2016, judgment was entered in accordance with the Court's order. (ECF No. 18.) On remand, the Commissioner awarded benefits to Plaintiff. (ECF Nos. 21-2.) On December 9, 2016, the parties filed a stipulation for an award of $5, 225 in attorney fees under EAJA (ECF No. 19), and on September 12, 2016, the Court entered an order on the stipulation, awarding EAJA attorney fees and expenses in the amount of $5, 225. (ECF No. 20.)

         On August 25, 2018, the Commissioner issued a notice that retroactive disability benefits had been awarded to Plaintiff, and that $19, 667, representing 25% of Plaintiff's past-due benefits, had been withheld from Plaintiff's award of disability benefits for payment of any applicable attorney fees. (ECF No. 21-2 at 3.) The notice does not, however, specify the total amount of past-due benefits awarded to Plaintiff. (Id.) Although the parties agree that $19, 667 represents 25% of the past-due benefits (ECF No. 21 at 1; ECF No. 23 at 1), a subsequent letter from the Commissioner, dated July 1, 2019, states that $15, 522 was being withheld, “which represents the balance of 25 percent of the past-due benefits payable” to Plaintiff. (ECF No. 21-6.)

         On July 9, 2019, Plaintiff's counsel filed a motion for attorney fees in the amount of $15, 522, with an offset of $5, 225 for EAJA fees already awarded. (ECF No. 21.) Plaintiff's counsel states in the motion that 25% of past-due benefits is $19, 667, but does not explain or discuss the July 1, 2019, letter stating that $15, 522 “represents the balance of 25 percent of the past-due benefits.” Defendant, however, indicates that the $4, 145 difference between the $19, 667 amount stated in the August 25, 2018, notice and the $15, 522 amount set forth in the July 1, 2019, letter represents a fee received by Plaintiff's counsel under 42 U.S.C. § 406(a). (ECF No. 23 at 2 (“Counsel indicated that she received fee under 42 U.S.C. § 406(a) in the amount of $4, 145.00, and has reduced her request by that amount.”).)

         Plaintiff's counsel's § 406(b) motion for attorney fees is now before the Court.


         Pursuant to the Social Security Act, attorneys may seek a reasonable fee for cases in which they have successfully represented social security claimants. 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 . . . .

         42 U.S.C. § 406(b)(1)(A) (emphasis added).

         “In contrast to fees awarded under fee-shifting provisions such as 42 U.S.C. § 1988, the [406(b)] fee is paid by the claimant out of the past-due benefits awarded; the losing party is not responsible for payment.” Crawford v. Astrue, 586 F.3d 1142, 1147 (9th Cir. 2009) (en banc) (citing Gisbrecht v. Barnhart, 535 U.S. 789, 802 (2002)). Even though the § 406(b) attorney fees award is not paid by the government, the Commissioner has standing to challenge the award. Craig v. Sec'y Dep't of Health & Human Servs., 864 F.2d 324, 328 (4th Cir. 1989), abrogated on other grounds in Gisbrecht, 535 U.S. at 807. The goal of fee awards under § 406(b) is to provide adequate incentive to represent claimants while ensuring that the usually meager disability benefits received are not greatly depleted. Cotter v. Bowen, 879 F.2d 359, 365 (8th Cir. 1989), abrogated on other grounds in Gisbrecht, 535 U.S. at 807.

         The 25% maximum fee is not an automatic entitlement, and courts are required to ensure that the requested fee is reasonable. Gisbrecht, 535 U.S. at 808-09 (section 406(b) does not displace contingent-fee agreements within the statutory ceiling; instead, section 406(b) instructs courts to review for reasonableness fees yielded by those agreements). “Within the 25 percent boundary . . . the attorney for the successful claimant must show that the fee sought is reasonable for the services rendered.” Id. at 807; see also Crawford, 586 F.3d at 1148 (holding that § 406(b) “does not specify how courts should determine whether a requested fee is reasonable” but “provides only that the fee must not exceed 25% of the past-due benefits awarded”).

         Generally, “a district court charged with determining a reasonable fee award under § 406(b)(1)(A) must respect ‘the primacy of lawful attorney-client fee arrangements,' . . . ‘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). The United States Supreme Court has identified several factors that may be considered in determining whether a fee award under a contingent-fee agreement is unreasonable and therefore subject to reduction by the court: (1) the character of the representation; (2) the results achieved by the representative; (3) whether the attorney engaged in dilatory conduct in order to increase the accrued amount of past-due benefits; (4) whether the benefits are large in ...

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