Ingrid Quinonez Rodenas v. Michael J Astrue, No. 2:2011cv08289 - Document 23 (C.D. Cal. 2013)
Court Description: MEMORANDUM AND ORDER GRANTING PLAINTIFFS MOTION FOR ATTORNEY FEES Pursuant to 42 USC 406(b) 20 by Magistrate Judge Sheri Pym: (see document image for further details). Based upon the foregoing considerations, the court GRANTS the Motion for Attor ney Fees Pursuant to 42 U.S.C. § 406(b). Accordingly, IT IS ORDERED: (1) the Commissioner shall pay fees in the amount of $16,000.00 to the Law Offices of Lawrence D. Rohlfing out of the sum withheld by the Commissioner from plaintiffs benefits; and (2) the Law Offices of Lawrence D. Rohlfing shall reimburse $4,500.00 to plaintiff. IT IS SO ORDERED. (ad)
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Ingrid Quinonez Rodenas v. Michael J Astrue Doc. 23 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 12 13 14 15 16 17 INGRID QUINONEZ RODENAS, ) ) ) Plaintiff, ) ) v. ) ) CAROLYN W. COLVIN, Acting ) Commissioner of Social Security, ) ) Defendant. ) ) Case No. CV 11-8289-SP MEMORANDUM AND ORDER GRANTING PLAINTIFF’S MOTION FOR ATTORNEY FEES PURSUANT TO 42 U.S.C. § 406(b) 18 19 Plaintiff’s counsel, Lawrence D. Rohlfing of the Law Offices of Lawrence 20 D. Rohlfing, has filed a Motion for Attorney Fees Pursuant to 42 U.S.C. § 406(b) 21 (“406(b) Motion”). Plaintiff’s counsel seeks an award of fees of $16,000 from a 22 recovery of $84,812 in retroactive benefits for plaintiff. For the reasons set forth 23 below, the court grants the 406(b) Motion for fees in this amount. 24 I. 25 BACKGROUND 26 Plaintiff Ingrid Quinonez Rodenas filed a complaint in this court on October 27 5, 2011, seeking a review of a denial of disability insurance benefits. On August 28 29, 2012, following the parties’ full briefing of the issues in dispute, the court 1 Dockets.Justia.com 1 reversed the decision of the Commissioner of Social Security and remanded the 2 matter to the Commissioner for further administrative proceedings pursuant to 3 sentence four of 42 U.S.C. § 405(g). On October 29, 2012, based on the parties’ 4 stipulation for the award of fees under the Equal Access to Justice Act (“EAJA”), 5 the court awarded plaintiff’s counsel fees and expenses in the amount of $4,500, 6 and costs in the amount of $410. 7 Upon remand to the Commissioner, on December 26, 2012, the 8 Administrative Law Judge (“ALJ”) found plaintiff has been under a disability 9 since March 16, 2009. See 406(b) Mtn., Ex. 2. On March 25, 2013, the Social 10 Security Administration (“SSA”) notified plaintiff that she was due monthly 11 benefits beginning in September 2009 in amounts ranging from $2,095.20 to 12 $2,207.50. 406(b) Mtn., Ex. 3. This amounts to past due benefits totaling 13 $84,812.00. See 406(b) Mtn., Rohlfing Decl. ¶ 4, Ex. 3. Of this, SSA withheld 14 “25 percent of past due benefits,” that is, “$21,203.00 from [plaintiff’s] past due 15 benefits in case [SSA] need[s] to pay [plaintiff’s] lawyer.” 406(b) Mtn., Ex. 3 at 2. 16 On March 29, 2013, plaintiff’s counsel Lawrence Rohlfing filed a Motion 17 for Attorney Fees pursuant to 42 U.S.C. § 406(b). Counsel Rohlfing seeks an 18 award of § 406(b) fees in the amount of $16,000.00, subject to an offset for the 19 $4,500.00 in EAJA fees previously paid. Counsel states he will also seek fees of 20 $8,000 under 42 U.S.C. § 406(a), but that the total of all fees sought will not 21 exceed the $21,203 withholding in this case. See 406(b) Mtn., Rohlfing Decl., ¶ 6. 22 The 406(b) Motion is supported by a Declaration of Lawrence Rohlfing and 23 various exhibits. Included among these is an agreement between plaintiff and the 24 Law Offices of Lawrence D. Rohlfing dated February 24, 2010, in which plaintiff 25 agreed to pay a fee for a successful prosecution of “25% of the backpay awarded 26 upon reversal of any unfavorable ALJ decision for work before the court . . . 27 subject to approval by the court with jurisdiction.” 406(b) Mtn., Ex. 1, ¶ 4. 28 Also included is a summary of the time spent by attorney Rohlfing, law 2 1 clerk Vijay Patel, and two paralegals on work before this court through remand to 2 the Commissioner. 406(b) Mtn., Rohlfing Decl., ¶ 5, Ex. 4. It shows they spent a 3 total of 34.2 hours of attorney and paralegal time representing plaintiff in this 4 court. Id. 5 The 406(b) Motion was served on plaintiff, and explicitly advised plaintiff 6 of her right to file a response to the Motion within fourteen days. 406(b) Mtn. at 7 2. Plaintiff did not file a response. Defendant, the Commissioner, did file a 8 response to the 406(b) Motion. Defendant takes no position on the reasonableness 9 of the fee request, but advised the court regarding certain legal and other 10 considerations appropriate to its analysis. Counsel Rohlfing filed a reply in 11 support of the 406(b) Motion. 12 II. 13 DISCUSSION 14 A. Fees Available to Attorneys Who Successfully Represent Social Security 15 Benefit Claimants in Court 16 An attorney who successfully represents a Social Security benefits claimant 17 in court may be awarded as part of the judgment “a reasonable fee . . . not in 18 excess of 25 percent of the total of the past-due benefits” awarded to the claimant. 19 42 U.S.C. § 406(b)(1)(A). The fee is payable “out of, and not in addition to, the 20 amount of such past-due benefits.” Id. Because benefits amounts figuring in the 21 fee calculation are limited to those past due, attorneys may not obtain additional 22 fees based on a claimant’s continuing entitlement to benefits. 23 Fee awards may be made under the Equal Access to Justice Act as well as 24 42 U.S.C. § 406(b), and such was the case here. As noted above, plaintiff was 25 previously awarded EAJA fees in the total amount of $4,500 for services rendered 26 by counsel in securing the remand of plaintiff’s case. An EAJA award, however, 27 offsets an award under § 406(b) so that the total of the past due benefits actually 28 received by the claimant is increased by the amount of the EAJA award up to the 3 1 point where the claimant could potentially obtain one hundred percent of past-due 2 benefits. Gisbrecht v. Barnhart, 535 U.S. 789, 796, 122 S. Ct. 1817, 152 L. Ed. 2d 3 996 (2002) (citation omitted). 4 In Gisbrecht, the Supreme Court resolved a circuit split concerning the 5 appropriate method of calculating fees under § 406(b). Id. at 799. Several 6 circuits, including the Ninth Circuit, had followed the “lodestar” method, under 7 which the number of hours reasonably devoted to each case was multiplied by a 8 reasonable hourly rate. Id. (citations omitted). Other circuits had given effect to 9 an attorney-client contingent-fee agreement if the resulting fee was reasonable. Id. 10 (citations omitted). 11 The Supreme Court evaluated the two approaches and concluded that 12 § 406(b) (which limits attorney’s fees to twenty-five percent of past-due benefits) 13 was designed to control, and not displace, contingent fee agreements that are 14 within the statutory ceiling. Id. at 807-09. The Court held that § 406(b) “calls for 15 court review of such arrangements as an independent check, to assure that they 16 yield reasonable results in particular cases.” Id. at 807. In rejecting the lodestar 17 approach, the Court noted that, while the lodestar method was used in federal18 court adjudication of disputes over the amount of fees properly shifted to the loser 19 in litigation, fee-shifting to a losing party was not relevant in § 406(b) cases. Id. 20 at 802. As the Court observed, § 406(b) does not authorize the prevailing party to 21 recover fees from the losing party; rather, it authorizes fees payable from the 22 successful party’s recovery. Id. 23 In testing the reasonableness of fees yielded by contingency fee agreements 24 within § 406(b)’s twenty-five percent ceiling, Gisbrecht provided some guidance 25 by identifying the following examples of factors or circumstances that may 26 warrant a reduction: (1) the result achieved; (2) “substandard” representation by 27 counsel; (3) delay by counsel (justifying a reduction to prevent counsel from 28 profiting from the accumulation of benefits while the case is pending due to any 4 1 foot-dragging); (4) “if the benefits are large in comparison to the amount of time 2 counsel spent on the case” thereby resulting in a windfall; and (5) counsel’s record 3 of the hours spent representing the claimant and counsel’s normal hourly billing 4 rate for non-contingency work. Id. at 808; see also Ellick v. Barnhart, 445 F. 5 Supp. 2d 1166, 1168-72 (C.D. Cal. 2006) (providing a thorough analysis of post6 Gisbrecht case law and factors considered by various courts). 7 In Crawford v. Astrue, 586 F.3d 1142 (9th Cir. 2009), the Ninth Circuit 8 examined the teachings of Gisbrecht as applied to three cases consolidated on 9 appeal, and provided some additional guidance as to how courts in this circuit are 10 to properly conduct that analysis. The court emphasized that, under Gisbrecht, the 11 district court “must respect ‘the primacy of lawful attorney-client fee agreements,’ 12 ‘looking first to the contingent-fee agreement, then testing it for reasonableness.’” 13 Crawford, 586 F.3d at 1148 (quoting Gisbrecht, 535 U.S. at 793, 808). After first 14 looking to the fee agreement, the court may “then adjust downward if the attorney 15 provided substandard representation or delayed the case, or if the requested fee 16 would result in a windfall.” Id. at 1151 (citing Gisbrecht, 535 U.S. at 808). The 17 court may “consider the lodestar calculation, but only as an aid in assessing the 18 reasonableness of the fee.” Id. (citing Gisbrecht, 535 U.S. at 808). The Ninth 19 Circuit particularly noted that “[t]he lodestar method under-compensates attorneys 20 for the risk they assume in representing SSDI claimants and ordinarily produces 21 remarkably smaller fees than would be produced by starting with the contingent22 fee agreement.” Id. at 1149. 23 B. The Reasonableness of the Fees Sought Here 24 As prescribed by Gisbrecht and Crawford, the court here begins with the 25 mutually executed contingency fee agreement between plaintiff and counsel’s law 26 firm. See 406(b) Mtn., Ex. 1. Plaintiff agreed to pay counsel attorney fees not 27 exceeding twenty-five percent of the back benefits awarded for work before the 28 court – the statutory maximum. Id. As discussed above, SSA ultimately awarded 5 1 plaintiff past due benefits totaling $84,812. Consequently, under the terms of the 2 fee agreement, plaintiff is contractually obligated to pay counsel total attorney fees 3 of $21,203 ($84,812 x .25), “subject to approval by the court.” See id. The record 4 does not indicate that the fee agreement was the product of any fraud, coercion, or 5 overreaching. 6 But plaintiff’s counsel here is not seeking fees of $21,203. Instead, 7 plaintiff’s counsel is seeking fees of $16,000 – equal to some 18.9 percent of the 8 benefits awarded. Plaintiff has not contested this amount sought. Defendant has 9 not taken a position on this amount, but has offered some critical analysis. The 10 court will therefore test this fee amount for reasonableness, considering the 11 analysis offered by defendant in the process. 12 Plaintiff’s counsel here achieved an outstanding result for plaintiff, and did 13 so efficiently and effectively. For example, plaintiff raised just two issues, and the 14 court found the ALJ erred as to both. Further, there was no unreasonable delay by 15 plaintiff’s counsel. Thus, the only question is whether the fees sought would 16 result in a windfall to plaintiff’s counsel. 17 Doing a version of the lodestar check, counsel here seeks $16,000 in fees 18 for 6.3 hours of attorney work, 24.1 hours of law clerk work, and 3.8 hours of 19 paralegal work. Based on the dates and descriptions provided for the work done 20 by counsel Rohlfing in March and May 2011, however, it does not appear that that 21 work should properly be considered work done on this district court case. See 22 406(b) Mtn., Ex. 4. Accordingly, the court reduces the attorney hours in question 23 to 4.8. The court also notes there appears to be a mathematical error in the total of 24 paralegal hours (see id.), and so increases the paralegal hours in question to 4.0. 25 Thus, the total combined attorney, law clerk, and paralegal hours in question 32.9. 26 Of the 32.9 hours, only 4.8 – about 15 percent – are attorney hours. This is 27 lower than usual, and should be taken into account in assessing the reasonableness 28 of the fees using the lodestar check. Defendant contends the court should value 6 1 the law clerk and paralegal hours at their EAJA hourly rates of $150 and $122.99 2 respectively, which would push the attorney hourly rate (for the 4.8 hours allowed 3 by the court) to more than $2,400. See Def.’s Resp. at 4 n.3. Plaintiff’s counsel 4 objects to this methodology, and the court agrees that it is flawed. Counsel’s own 5 EAJA hourly rate was only $180.59. See 406(b) Mtn., Ex. 4. Defendant offers no 6 reason why the court should consider the law clerk and paralegal hourly rates at 7 only the EAJA rate when doing the lodestar check, but not the attorney hourly 8 rate. Indeed, following this methodology might have the perverse result of 9 encouraging attorneys to perform work that could reasonably be performed by law 10 clerks or paralegals. 11 Further, as plaintiff’s counsel notes, other courts have routinely combined 12 attorney and paralegal time when conducting the lodestar check. See, e.g., 13 Crawford, 586 F.3d at 1145-46. Doing so here, fees of $16,000 for 32.9 total 14 hours of combined attorney and paralegal work amounts to a de facto hourly rate 15 of $486.32. One way of taking into account that only 15 percent of these hours are 16 attorney time would be to assume the attorney rate is twice that of the law clerk or 17 paralegal rate, and calculate the hourly rates accordingly. Doing so results in a 18 law clerk/paralegal rate of $424.40 (for 28.1 hours) and an attorney rate of 19 $848.81 (for 4.8 hours). These rates are high, but not out of line with the de facto 20 hourly rates in approved fee awards in other, similar cases. For example, in 21 Crawford, the Ninth Circuit approved as reasonable the following fee awards as 22 requested by plaintiffs’ counsel: 23 • Counsel for Crawford requested and received fees of $21,000 on an 24 $123,891.20 award of past-due benefits (16.95% of the recovery), for 19.5 25 hours of attorney time and 4.5 hours of paralegal time, for a combined de 26 facto hourly rate of $875; 27 • Counsel for Washington requested and received fees of $11,500 on a 28 $76,041 award of past-due benefits (15.12% of the recovery), for 17.45 7 1 hours of attorney time and 4.7 hours of paralegal time, for a combined de 2 facto hourly rate of $519.19; and 3 • Counsel for Trejo requested and received fees of $24,000 on a $172,223 4 award of past-due benefits (13.94% of the recovery), for 26.9 hours of 5 attorney time and 2.6 hours of paralegal time, for a combined de facto 6 hourly rate of $813.56. 7 Crawford, 586 F.3d at 1145-46, 1152. Even assuming an $848 de facto attorney 8 hourly rate here, that is less than the rate approved for counsel for Crawford, and 9 is only slightly higher than the rate approved for counsel for Trejo, and those rates 10 included paralegal time. A $424 hourly rate for law clerk and paralegal work is 11 high, but again is less than the rates approved in Crawford. 12 Further, as noted, the fees sought amount to only 18.9 percent of the 13 recovery here, less than counsel could have sought under the contingency fee 14 agreement. As noted by the court in Crawford: 15 [T]he requested fees [in each of the three consolidated cases], which 16 were significantly lower than the fees bargained for in the 17 contingent-fee agreements, were not excessively large in relation to 18 the benefits achieved. In each case, counsel voluntarily evaluated the 19 fees in comparison to the amount of time spent on the case. In each 20 case, counsel voluntarily reduced those fees substantially from the 21 allowable 25%. 22 Id. at 1151-52. The same is true in this case. 23 In addition, counsel has represented he will not seek total fees (including 24 the § 406(a) fees to which he may be entitled) in excess of the $21,203 25 withholding, and to that extent he has voluntarily limited the fees he might have 26 sought. Cf. Clark v. Astrue, 529 F.3d 1211, 1215 (9th Cir. 2008) (holding 42 27 U.S.C. § 406(b) does not limit the total amount of attorney’s fees awarded under 28 both §§ 406(a) and 406(b)). Moreover, the value of this case to plaintiff is 8 1 substantially greater than the $84,812 in past due benefits awarded. In addition to 2 the past-due benefits, plaintiff will receive ongoing monthly benefits payments, 3 which began in April. See 406(b) Mtn., Ex. 3. 4 As with any contingency fee agreement case, the risk of losing plaintiff’s 5 case – and thus the risk that counsel would not be paid at all – was substantial. In 6 light of the substantial risk, and given the work done, results achieved, and other 7 circumstances in this case, the court finds that the fees that counsel seeks here are 8 not unreasonable. 9 III. 10 CONCLUSION 11 Based upon the foregoing considerations, the court GRANTS the Motion 12 for Attorney Fees Pursuant to 42 U.S.C. § 406(b). Accordingly, IT IS ORDERED: 13 (1) the Commissioner shall pay fees in the amount of $16,000.00 to the Law 14 Offices of Lawrence D. Rohlfing out of the sum withheld by the Commissioner 15 from plaintiff’s benefits; and (2) the Law Offices of Lawrence D. Rohlfing shall 16 reimburse $4,500.00 to plaintiff. 17 IT IS SO ORDERED. 18 19 20 21 DATED: April 30, 2013 SHERI PYM United States Magistrate Judge 22 23 24 25 26 27 28 9
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