section 406(b) does not 6 displace contingent-fee agreements within the statutory ceiling; instead, section 406(b) instructs 7 courts to review for reasonableness fees yielded by those agreements
How later courts described this case
- section 406(b) does not 6 displace contingent-fee agreements within the statutory ceiling; instead, section 406(b) instructs 7 courts to review for reasonableness fees yielded by those agreements
Written by the judges who cited it.
The opinion
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8 UNITED STATES DISTRICT COURT
9 FOR THE EASTERN DISTRICT OF CALIFORNIA
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11 KRISTOPHER KNAPP, No. 1:17-cv-00773-EPG
12 Plaintiff,
13 v. ORDER GRANTING MOTION FOR
ATTORNEY’S FEES PURSUANT TO 42
14 ANDREW SAUL, Commissioner of Social U.S.C. § 406(B)
Security,
15 (ECF No. 41)
Defendant.
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17 On August 27, 2020, Plaintiff’s counsel, Kelsey Mackenzie Brown (“Brown”), filed a
18 motion for attorney’s fees pursuant to 42 U.S.C. § 406(b). (ECF No. 41). Plaintiff was served
19 with a copy of the motion and given the opportunity to object by September 24, 2020. (ECF Nos.
20 42, 44, 46). Defendant filed a response to the motion which took no position on the
21 reasonableness of Brown’s request for attorney’s fees. (ECF No. 48).
22 For the reasons set forth below, the motion for an award of attorney’s fees is GRANTED
23 in the amount of $28,500, subject to an offset of $5,500 in fees already awarded pursuant to the
24 Equal Access to Justice Act (“EAJA”) on January 29, 2020, (ECF No. 40).
25 I. BACKGROUND
26 Plaintiff, acting pro se, (see ECF No. 4), brought the underlying action seeking judicial
27 review of a final administrative decision denying her claim for disability insurance benefits and
28 supplemental security income under the Social Security Act on June 6, 2017. (ECF No. 1). On
1 April 11, 2018, Brown filed a notice of appearance. On October 2, 2018, the Court reversed the
2 administrative law judge, remanded the case to the Social Security Administration for future
3 proceedings, and entered judgment accordingly. (ECF Nos. 35, 36). On January 29, 2020, the
4 Court entered an award of $5,500 in attorney’s fees under the EAJA pursuant to the parties’
5 stipulation. (ECF Nos. 39, 40).
6 On December 11, 2019, the Commissioner wrote a letter to Plaintiff, indicating that
7 retroactive disability benefit payments had been awarded to him as of March 2012. (ECF No. 41-
8 2 at 1). The notice indicated that $54,502.75 was being withheld, “in case we need to pay your
9 representative.” (Id. at 4). That amount represents 25% of Plaintiff’s past-due benefits.1
10 On August 27, 2020, Brown filed a motion for attorney’s fees in the amount of $28,500,
11 with an offset of $5,500 for EAJA fees already awarded. (ECF No. 41).
12 II. DISCUSSION
13 Pursuant to the Social Security Act, attorneys may seek a reasonable fee for cases in
14 which they have successfully represented social security claimants. Section 406(b) provides:
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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
16 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
17 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
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attorney out of, and not in addition to, the amount of such past-due benefits . . . .
19 42 U.S.C. § 406(b)(1)(A) (emphasis added).
20 “In contrast to fees awarded under fee-shifting provisions such as 42 U.S.C. § 1988, the
21 [406(b)] fee is paid by the claimant out of the past-due benefits awarded; the losing party is not
22 responsible for payment.” Crawford v. Astrue, 586 F.3d 1142, 1147 (9th Cir. 2009) (en banc)
23 (citing Gisbrecht v. Barnhart, 535 U.S. 789, 802 (2002)). Even though the § 406(b) attorney fees
24 award is not paid by the government, the Commissioner has standing to challenge the award.
25 Craig v. Sec’y Dep’t of Health & Human Servs., 864 F.2d 324, 328 (4th Cir. 1989), abrogated on
26 other grounds in Gisbrecht, 535 U.S. at 807. The goal of fee awards under § 406(b) is to provide
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1 Plaintiff’s first check, which represented the amount owed through October 2019, was for $163,508.25. (Id. at 1).
28 That amount, plus $54,502.75, is $218,011. Twenty-five percent of that $218,011 is $54,502.75.
1 adequate incentive to represent claimants while ensuring that the usually meager disability
2 benefits received are not greatly depleted. Cotter v. Bowen, 879 F.2d 359, 365 (8th Cir. 1989),
3 abrogated on other grounds in Gisbrecht, 535 U.S. at 807.
4 The 25% maximum fee is not an automatic entitlement, and courts are required to ensure
5 that the requested fee is reasonable. Gisbrecht, 535 U.S. at 808-09 (section 406(b) does not
6 displace contingent-fee agreements within the statutory ceiling; instead, section 406(b) instructs
7 courts to review for reasonableness fees yielded by those agreements). “Within the 25 percent
8 boundary . . . the attorney for the successful claimant must show that the fee sought is reasonable
9 for the services rendered.” Id. at 807; see also Crawford, 586 F.3d at 1148 (holding that § 406(b)
10 “does not specify how courts should determine whether a requested fee is reasonable” but
11 “provides only that the fee must not exceed 25% of the past-due benefits awarded”).
12 Generally, “a district court charged with determining a reasonable fee award under
13 § 406(b)(1)(A) must respect ‘the primacy of lawful attorney-client fee arrangements,’ . . .
14 ‘looking first to the contingent-fee agreement, then testing it for reasonableness.’” Crawford, 586
15 F.3d at 1148 (quoting Gisbrecht, 535 U.S. at 793, 808). The United States Supreme Court has
16 identified several factors that may be considered in determining whether a fee award under a
17 contingent-fee agreement is unreasonable and therefore subject to reduction by the court: (1) the
18 character of the representation; (2) the results achieved by the representative; (3) whether the
19 attorney engaged in dilatory conduct in order to increase the accrued amount of past-due benefits;
20 (4) whether the benefits are large in comparison to the amount of time counsel spent on the case;
21 and (5) the attorney’s record of hours worked and counsel’s regular hourly billing charge for non-
22 contingent cases. Id. (citing Gisbrecht, 535 U.S. at 807-08).
23 Here, Plaintiff and Brown signed a fee agreement, which provides:
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THE CLIENT authorizes MACKNEZIE LEGAL to seek fees from their past due
25 benefits totaling up to 25% of all past due benefits, pursuant to 42 U.S.C. §
406(b), if the CLIENT is awarded benefits by the Court on appeal, or the Social
26 Security Administration after the Court remands the case to the Social Security
Administration for further proceedings.
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28 (ECF No. 41-1 at 2).
1 The Court has considered the character of counsel’s representation of Plaintiff and the
2 good results achieved by counsel, which includes an award of benefits. Plaintiff’s counsel
3 represents that she spent 31.4 hours of attorney time representing Plaintiff in this matter,
4 ultimately gaining a favorable decision in that the case was remanded to the Commissioner, who
5 then awarded benefits to Plaintiff. (ECF No. 41-3). Three of those hours appeared to be spent
6 seeking EAJA fees. (See ECF Nos. 36 (entering judgment on October 2, 2018), 37 (motion for
7 EAJA fees filed on December 28, 2018), 41-3 (showing three hours spent on December 28,
8 2018)). There is no indication that a reduction of the award is warranted due to any substandard
9 performance by Plaintiff’s counsel as counsel secured a successful result for Plaintiff. There also
10 is no evidence that counsel engaged in any dilatory conduct resulting in delay.
11 Plaintiff’s counsel seeks an award of $28,500, which results in an hourly rate of $907. The
12 Ninth Circuit found a similar rate reasonable in 2009. See, e.g., Crawford, 586 F.3d at 1153
13 (explaining that the majority opinion found reasonable effective hourly rates equaling $519, $875,
14 and $902) (J. Clifton, concurring in part and dissenting in part). As a different court in this district
15 recently noted, even higher effective hourly rates have been approved:
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[S]ince Gisbrecht, courts note that reducing a fee request is dicey business and
17 find fee awards of an effective hourly rate much higher than this to be reasonable.
Williams v. Berryhill, No. EDCV 15-919-KK, 2018 WL 6333695, at *2 (C.D.
18 Cal. Nov. 13, 2018) (awarding fee request that provides an effective hourly rate of
$1,553.36 per hour); Coles v. Berryhill, No. EDCV 14-1488-KK, 2018 WL
19 3104502, at *3 (C.D. Cal. June 21, 2018) (effective hourly rate of $1,431.94
reasonable under the circumstances); Palos v. Colvin, No. CV 15-04261-DTB,
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2016 WL 5110243, at *2 (C.D. Cal. Sept. 20, 2016) (fees sought translate to
21 $1,546.39 per hour for attorney and paralegal services); see also Villa v. Astrue,
No. CIVS-060846 GGH, 2010 WL 118454, at *1, n.1 (E.D. Cal. Jan. 7, 2010)
22 (“In practice, the more efficient counsel is in court, the higher will be the hourly
fee amount represented in a § 406 fee award.”)
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24 Mayfield v. Comm’r of Soc. Sec., No. 1:16-cv-01084-SAB, ECF No. 24, at 5 (E.D. Cal. March 19,
25 2020).
26 Further, the requested attorney’s fees award of $28,500 does not exceed 25% of past-due
27 benefits, and is not excessive in relation to the past-due benefits awarded. See generally Ortega v.
28 Comm'r of Soc. Sec., No. 1:12–cv–01030–AWI–SAB, 2015 WL 5021646, at *3 (E.D. Cal. Aug.
1 21, 2015) (granting § 406(b) attorney fees in the amount of $24,350); Thomas v. Colvin, No.
2 1:11–cv–01291–SKO, 2015 WL 1529331, at *3 (E.D. Cal. Apr. 3, 2015) (granting § 406(b)
3 attorney fees in the amount of $44,603.50); Boyle v. Colvin, No. 1:12–cv–00954–SMS, 2013 WL
4 6712552, at *2 (E.D. Cal. Dec. 19, 2013) (granting § 406(b) attorney fees in the amount of
5 $20,577.57); Jamieson v. Astrue, No. 1:09-cv-00490-LJO-DLB, 2011 WL 587096, at *2 (E.D.
6 Cal. Feb. 9, 2011) (recommending an award of § 406(b) attorney fees in the amount of $34,500),
7 adopted by 2011 WL 841363.
8 In making this determination, the Court recognizes the contingent-fee nature of this case
9 and counsel’s assumption of risk in agreeing to represent Plaintiff under such terms. “District
10 courts generally have been deferential to the terms of contingency fee contracts in § 406(b)
11 cases.” Harris v. Barnhart, 262 F. Supp. 2d 1033, 1037 (N.D. Cal. 2003). Attorneys who agree to
12 represent claimants pursuant to a contingent fee agreement assume the risk of receiving no
13 compensation for their time and effort if the action does not succeed. Id. Here, Plaintiff's attorney
14 accepted substantial risk of loss in representing Plaintiff, whose application had already been
15 denied at the administrative level. Plaintiff agreed to the contingent fee, and counsel successfully
16 secured a remand and ultimately an award of substantial benefits to Plaintiff.
17 An award of attorney fees pursuant to § 406(b) in the amount of $28,500 is, therefore,
18 appropriate. An award of § 406(b) fees, however, must be offset by any prior award of attorney
19 fees granted under the EAJA. See 28 U.S.C. § 2412; Gisbrecht, 535 U.S. at 796. Plaintiff was
20 previously awarded $5,500 in fees pursuant to the EAJA; as such, the § 406(b) award will be
21 offset by $5,500.
22 III. CONCLUSION AND ORDER
23 For the reasons stated above, the Court finds that the attorney fees sought by Plaintiff’s
24 counsel pursuant to § 406(b) are reasonable. Accordingly, IT IS ORDERED:
25 1. Plaintiff's counsel’s motion for an award of attorney fees pursuant to 42 U.S.C. §
26 406(b) in the amount of $28,500 (ECF No. 21) is GRANTED;
27 2. Plaintiff's counsel is ordered to reimburse Plaintiff $5,500 of the § 406(b) fees
28 awarded as an offset for the EAJA fees previously awarded pursuant to 28 U.S.C. § 2412(d).
8 MMVUEIOEI St Pa ee POY VI
1 3. The Clerk of the Court is respectfully directed to serve a copy of this Order on
2 | Kristopher Knapp, 1770 Alluvial Ave., Apt. 188, Fresno, CA 93611.
3
4 IT IS SO ORDERED.
5] Dated: _ October 2, 2020 [Jee ey
6 UNITED STATES MAGISTRATE JUDGE
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