Brown v. Dudek

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF HAWAII

LEARTIS BROWN, ) Civil No. 22-00334 LEK-KJM

)

Plaintiff, ) FINDINGS AND

) RECOMMENDATION TO GRANT

vs. ) PETITION FOR 406(b) FEES

)

LELAND DUDEK, Acting )

Commissioner of Social Security )

Administration, )

)

Defendant. )

_______________________________)

FINDINGS AND RECOMMENDATION

TO GRANT PETITION FOR 406(b) FEES

On February 18, 2025, counsel for Plaintiff Leartis Brown (“Plaintiff”) filed

a Petition for 406(b) Fees (“Petition”). ECF No. 23. On February 19, 2025,

Defendant Leland Dudek, Acting Commissioner of the Social Security

Administration (“Defendant”), filed a Response to the Petition. ECF No. 24.

Therein, Defendant states that he “neither supports nor opposes” the Petition. Id.

at 2. On February 20, 2025, pursuant to the Court’s request, Plaintiff’s counsel

filed a Supplemental Declaration in support of the Petition. ECF No. 26.

The Court elects to decide this matter without a hearing pursuant to Rule

7.1(c) of the Local Rules of Practice for the United States District Court for the

District of Hawaii. After carefully reviewing the filings and the record in this case,

the Court FINDS AND RECOMMENDS that the district court GRANT the

Petition.

BACKGROUND

This matter concerns Plaintiff’s appeal of the Social Security Administration

(“SSA”) Commissioner’s denial of Social Security disability insurance benefits to

Plaintiff. On July 27, 2022, Plaintiff filed a Complaint for Review of Social

Security Disability Benefits Determinations (“Complaint”). ECF No. 1. On

October 17, 2022, Defendant filed an Answer to the Complaint. ECF No. 12. On

January 13, 2023, Plaintiff filed an opening brief. ECF No. 18. On March 13,

2023, the parties stipulated—with the approval of the district court—to voluntarily

remand this action to the SSA Commissioner for further administrative action

pursuant to sentence four of 42 U.S.C. § 405(g). ECF No. 19. In addition, the

parties requested that the Clerk of Court enter judgment in favor of Plaintiff and

against Defendant, reversing the final decision of the Commissioner. Id. That

same day, the Clerk of Court entered judgment in accordance with the parties’

request. ECF No. 20.

On May 31, 2023, the parties stipulated—with the approval of the district

court—for Plaintiff, through his counsel, to receive an award of attorneys’ fees for

$7,300.00 pursuant to the Equal Access to Justice Act (“EAJA”), 28 U.S.C. §

2412(d). ECF No. 22.

On March 13, 2024, a second administrative hearing was held. ECF No. 23

at 3. Plaintiff subsequently received a favorable decision granting his application

for Social Security disability insurance benefits in full. Id.

Pursuant to the terms of his retainer agreement with counsel, Plaintiff agreed

to pay counsel a fee equal to 25% of his past-due benefits if his Social Security

appeal was successful. ECF No. 23-3. In February 2025, Plaintiff’s counsel

received a Notice of Award for Plaintiff from the SSA. ECF No. 23-4. The Notice

of Award indicates that the SSA has withheld 25% of Plaintiff’s past-due benefits,

$41,354.50, for purposes of paying attorneys’ fees. Id. at 3.

On February 18, 2025, Plaintiff’s counsel filed the instant Petition. ECF

No. 23. Based on the Notice of Award, Plaintiff’s counsel requests an award of

attorneys’ fees in the amount of $41,354.50 pursuant to 42 U.S.C. § 406(b). Id. at

1. Plaintiff’s counsel states that she “will reimburse [Plaintiff] the entire $7,300.00

EAJA award upon receipt of the 406B [sic] fees.” ECF No. 26 at 3 ¶ 14.

DISCUSSION

Pursuant to § 406(b), the court may award reasonable attorneys’ fees to a

successful claimant’s counsel up to 25% of the claimant’s past-due benefits. See

42 U.S.C. § 406(b)(1)(A). This limit applies to the total of EAJA and § 406(b)

fees combined. See Gisbrecht v. Barnhart, 535 U.S. 789, 796 (2002) (holding that

a district court may award fees under both the EAJA and § 406(b), “but the

claimant’s attorney must refund to the claimant the amount of the smaller fee”

(alterations and citations omitted)).

The attorneys’ fees awarded under § 406(b) are paid by the claimant out of

the past-due benefits awarded, and the claimant’s attorney bears the burden of

demonstrating that the requested fees are reasonable. Id. at 807. If counsel

represents a claimant pursuant to a contingency fee agreement, that agreement is

the starting point for the Court’s reasonableness assessment. See id. at 808; see

also Crawford v. Astrue, 586 F.3d 1142, 1148 (9th Cir. 2009) (en banc). If the fee

requested is consistent with the fee arrangement and is within the statutory

maximum, the Court then conducts an “independent check” to determine whether

the requested fee is reasonable “based on the character of the representation and

the results the representative achieved.” See Gisbrecht, 535 U.S. at 807–08

(citations omitted).

A fee resulting from a contingent-fee agreement is

unreasonable, and thus subject to reduction by the court, if the

attorney provided substandard representation or engaged in dilatory

conduct in order to increase the accrued amount of past-due benefits,

or if the “benefits are large in comparison to the amount of time

counsel spent on the case” . . . [such that] the requested fee would

result in a windfall.

Crawford, 586 F.3d at 1148, 1151 (quoting and citing Gisbrecht, 535 U.S. at 806,

808).

The Court has carefully reviewed the Petition, including the declarations and

exhibits submitted in support of the Petition, and finds that Plaintiff’s counsel met

her burden in demonstrating that the requested fees are reasonable. Pursuant to the

fee agreement, Plaintiff agreed to pay counsel 25% of his past-due benefits if

counsel successfully represented him on appeal and owed no fees if the appeal was

unsuccessful. See ECF No. 23-3. Counsel’s request for $41,354.50, less the

$7,300 EAJA award to be returned to Plaintiff, represents the statutory maximum

25% of the past-due benefits awarded to Plaintiff.

Plaintiff’s counsel provided quality representation and obtained a successful

result in this court, which resulted in Plaintiff receiving significant past-due

benefits. See ECF No. 23 at 7. In addition, Plaintiff is now entitled to “retro-

active hospital insurance under Medicare, the value of which is not accounted for

in the retro-active award.” Id. The Court thus finds no reason to reduce fees for

substandard performance. In addition, there is no evidence that counsel caused any

delay to suggest that the Court should reduce the fees award for dilatory conduct.

Moreover, the Court finds that reduction is not necessary to prevent counsel

from receiving a windfall. In her supplemental declaration in support of the

Petition, counsel indicates that she spent 34.8 hours litigating this case in federal

court. See ECF No. 26 at 3 ¶ 10 (citing ECF No. 26-1). Dividing the fees

requested ($41,354.50) by the hours spent (34.8) results in an hourly rate of

$1,188.35. Courts in this circuit have regularly awarded fees with hourly rates

exceeding $1,000 in similar cases. See Kelly Kay M. v. O’Malley, Case No.: 22-

cv-01969-DDL, 2024 WL 4536462, at *3 (S.D. Cal. Oct. 21, 2024) (granting

counsel’s petition for attorneys’ fees pursuant to § 406(b), where the fees requested

divided hours spent yielded an “effective hourly rate of $1,923.07”); Brazile v.

Comm’r of Soc. Sec., CASE NO. C18-5914JLR, 2022 WL 503779, at *3 (W.D.

Wash. Feb. 18, 2022) (collecting cases); Hearn v. Barnhart, 262 F. Supp. 2d 1033,

1037 (N.D. Cal. 2003) (stating that “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”).

The Court thus finds that no downward adjustment in the requested attorneys’ fees

is necessary in this case.

CONCLUSION

Based on the foregoing, the Court finds that Plaintiff’s counsel’s request for

attorneys’ fees is reasonable. The Court thus FINDS AND RECOMMENDS that

the district court GRANT the Petition and award Plaintiff’s counsel $41,354.50 in

attorneys’ fees in accordance with 42 U.S.C. § 406(b). The Court also

RECOMMENDS that the district court DIRECT Plaintiff’s counsel to reimburse

Plaintiff for the $7,300.00 in fees previously awarded under the Equal Access to

Justice Act, 28 U.S.C. § 2412(d), upon receipt of the § 406(b) fees.

IT IS SO FOUND AND RECOMMENDED.

DATED: Honolulu, Hawaii, February 26, 2025.

i Le Me >

dof Kenneth J. Mansfield

D> “oe United States Magistrate Judge

<r im □□

Brown vy. Dudek, Civil No. 22-00334 LEK-KJM; Findings and Recommendation to Grant

Petition for 406(b) Fees