Michael L Morrison v. Jo Anne B Barnhart, No. 5:2005cv00516 - Document 29 (C.D. Cal. 2008)

Court Description: OPINION AND ORDER by Judge Charles F. Eick. The Motion is granted in part. Section 406(b) fees are allowed in the amount of $13,906.25 to be paid out of past due benefits. The parties shall proceed accordingly. (sp)

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Michael L Morrison v. Jo Anne B Barnhart Doc. 29 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 12 13 14 15 16 MICHAEL L. MORRISON, ) ) Plaintiff, ) ) v. ) ) MICHAEL J. ASTRUE,1 COMMISSIONER ) OF SOCIAL SECURITY ADMINISTRATION, ) ) ) Defendant. ) ___________________________________) NO. ED CV 05-516-E OPINION AND ORDER GRANTING IN PART COUNSEL S MOTION FOR ATTORNEY FEES PURSUANT TO 42 U.S.C. SECTION 406(b) 17 18 PROCEEDINGS 19 20 On November 27, 2007, counsel for Plaintiff filed a Notice of 21 Motion and Motion for Award of Attorney s Fees [42 USC § 406(b)] 22 ( the Motion ), seeking $19,904.13. 23 December 26, 2007, which purportedly takes no position as to whether 24 the requested fee is reasonable, but notes certain factors for the 25 Court s consideration. 26 submission without oral argument. 27 2007 Minute Order. Defendant filed a response on The Court has taken the Motion under See Local Rule 7-15; December 4, 28 1 Michael J. Astrue is substituted as Commissioner of Social Security pursuant to Fed. R. Civ. P. 25(d)(1). Dockets.Justia.com 1 BACKGROUND 2 3 Plaintiff filed a complaint on June 13, 2005, seeking review 4 of the Commissioner s denial of benefits.2 5 answer, Plaintiff filed a motion for summary judgment. 6 for summary judgment asserted that the Commissioner s denial should 7 be reversed, and benefits should be awarded, because: (1) the 8 Administrative Law Judge ( ALJ ) allegedly failed to evaluate 9 properly the opinion of Plaintiff s treating physicians; (2) the ALJ Following Defendant s The motion 10 allegedly failed to evaluate properly Plaintiff s subjective 11 complaints; (3) the ALJ allegedly failed to evaluate properly 12 Plaintiff s sister s testimony in determining Plaintiff s residual 13 functional capacity; and (4) the ALJ allegedly erred in applying the 14 Grids to determine Plaintiff s residual functional capacity, given 15 Plaintiff s asserted non-exertional limitations. 16 Notice and Motion for Summary Judgment, filed May 19, 2006. See Plaintiff s 17 18 On June 22, 2006, the Court remanded the matter to the Social 19 Security Administration for further proceedings pursuant to sentence 20 four of 42 U.S.C. section 405(g). 21 by rejecting Plaintiff s treating physicians opinion without stating The Court found that the ALJ erred 22 23 24 25 26 27 28 2 Plaintiff filed an application for benefits with the Social Security Administration that was denied initially and on reconsideration. See Administrative Record, filed October 25, 2005 ( A.R. ) pp. 63-74, 78-80. An Administrative Law Judge then conducted a hearing and issued an unfavorable decision on May 11, 2004. A.R. 17-25, 310-61. Plaintiff s counsel reportedly began representing Plaintiff on May 10, 2005, after the Appeals Council denied review of the unfavorable decision. See Motion, p. 2; see also A.R. 5-7 (Appeals Council denial); Exhibit C to Motion (retainer agreement). 2 1 specific, legitimate reasons for doing so, or without adequate 2 inquiry. 3 Plaintiff could perform work existing in the national economy. 4 Memorandum Opinion and Order of Remand, filed June 22, 2006, pp. 3- 5 6. 6 June 22, 2006. The ALJ also erred by relying on the Grids to find The Court entered a judgment accordingly. See See Judgment filed 7 8 9 Following remand, the Administration conducted proceedings that resulted in a favorable decision for Plaintiff and an award of 10 past-due benefits from January 2002, totaling $100,816.50. 11 Exhibit B filed with the Motion. 12 from this award for attorney fees based on the parties fee 13 agreement. See The Commission withheld $25,204.13 See Exhibits B and C to Motion. 14 15 Counsel now moves for $19,904.13 in fees pursuant to the fee 16 agreement. See Motion, p. 2. This amount represents 25 percent of 17 past due benefits, less $5,300 in administrative fees counsel has 18 recovered under 42 U.S.C. § 406(a). 19 proposes to credit Plaintiff with $3,601.16, the presumptive award 20 of attorney fees counsel could have recovered under the Equal Access 21 to Justice Act ( EAJA ),3 for a net fee of $16,302.97. From this award, counsel See Motion, 22 23 24 25 26 27 28 3 Counsel admits he inadvertently did not seek EAJA fees. See Motion, p. 14. Attorneys who successfully represent social security claimants in court may be awarded fees under both the EAJA and section 406(b), but the attorney must refund to the claimant the amount of the smaller fee awarded. See 28 U.S.C. § 2412. Gisbrecht v. Barnhart, 535 U.S. 789, 796 (2002) ( Fee awards may be made under both [the EAJA and section 406(b)], but the claimant s attorney must refund to the claimant the amount of the smaller fee. ) (internal quotation omitted). The Court declines to decide (continued...) 3 1 pp. 2, 15; 28 U.S.C. § 2412(d)(1)(A)-(B) (EAJA). 2 APPLICABLE LAW 3 4 Under 42 U.S.C. section 406(b), the Court may allow attorney 5 6 fees in a reasonable amount, not to exceed 25 percent of the total 7 past-due benefits awarded to the claimant. 8 independent duty to ensure that a section 406(b) contingency fee is 9 reasonable. The Court has an See id.; Gisbrecht v. Barnhart, 535 U.S. 789 (2002) 10 ( Gisbrecht ).4 11 /// 12 13 14 15 16 17 18 19 3 (...continued) whether Plaintiff would have been entitled to an EAJA award had counsel made a timely application, or the amount of any such hypothetical award. See 28 U.S.C. § 2412(d)(1)(A)-(B) (noting requirements for fee recovery); see also Clinton v. City of New York, 524 U.S. 417, 429-30 (1998) ( Article III of the Constitution confines the jurisdiction of the federal courts to actual Cases and Controversies . . . ). Any potential issue concerning the effect of counsel s failure to file an EAJA application should remain, in the first instance at least, a matter between Plaintiff and counsel. 4 20 21 22 23 24 25 Section 406(b)(1) provides: Whenever a court renders a judgment favorable to a claimant . . . 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 . . . In case of any such judgment, no other fee may be payable . . . for such representation except as provided in this paragraph. 26 27 28 See 42 U.S.C. § 406(b)(1)(A). Section 406(b) supplements section 406(a), which provides that the Commissioner may award attorney fees to a successful claimant s counsel for work performed before the Social Security Administration. See 42 U.S.C. § 406(a). 4 1 2 The United States Supreme Court has explained that section 406(b): 3 4 . . . does not displace contingent-fee agreements as 5 the primary means by which fees are set for 6 successfully representing Social Security benefits 7 claimants in court. 8 review of such arrangements as an independent check, to 9 assure that they yield reasonable results in particular Rather, § 406(b) calls for court 10 cases. 11 Agreements are unenforceable to the extent that they 12 provide for fees exceeding 25 percent of the past-due 13 benefits. 14 attorney for the successful claimant must show that the 15 fee sought is reasonable for the services rendered. Congress has provided one boundary line: Within this 25 percent boundary . . . the 16 17 Gisbrecht at 807 (citations omitted). 18 19 When a contingency fee falls within the 25 percent boundary, 20 as here, Gisbrecht instructs that the Court appropriately may reduce 21 counsel s recovery: 22 23 . . . based on the character of the representation and 24 the results the representative achieved. 25 attorney is responsible for delay, for example, a 26 reduction is in order so that the attorney will not 27 profit from the accumulation of benefits during the 28 pendency of the case in court. 5 If the If the benefits are 1 large in comparison to the amount of time counsel spent 2 on the case [thereby resulting in a windfall], a 3 downward adjustment is similarly in order. 4 5 Id. at 808 (citations omitted) (emphasis added); see also Straw v. 6 Bowen, 866 F.2d 1167, 1169-70 (9th Cir. 1989) (in traditional, non- 7 contingency fee analysis, the court multiplies reasonable hours 8 expended by the prevailing market rate to arrive at a lodestar 9 figure ; the court may adjust the lodestar figure by considering the 10 factors identified in Kerr v. Screen Extras Guild, Inc., 526 F.2d 67, 11 70 (9th Cir. 1975), cert. denied, 425 U.S. 951 (1976), to the extent 12 the lodestar figure does not already subsume such factors). 13 Gisbrecht does not instruct precisely how a district court should 14 quantify the downward adjustment when the court concludes such an 15 adjustment is in order. 16 17 Justice Scalia dissented in Gisbrecht, expressing concern that 18 the majority opinion does nothing whatever to subject [section 19 406(b)] fees to anything approximating a uniform rule of law. 20 Gisbrecht, 535 U.S. at 809. 21 well-founded. 22 Barnhart, 445 F. Supp. 2d 1166 (C.D. Cal. 2006), a survey of the 23 cases applying Gisbrecht to section 406(b) fee requests reveals 24 considerable divergence and scant evidence of any uniform rule of 25 law. Justice Scalia s concern may have been As this Court recently discussed in Ellick v. See Ellick, 445 F. Supp. 2d at 1168-72, for a summary of the 26 27 28 6 1 reported decisions.5 2 5 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 At the time of the Ellick decision, there were 43 reported decisions applying Gisbrecht to section 406(b) fee requests. There have been fourteen reported decisions so applying Gisbrecht since Ellick. See Ugorek v. Astrue, 2008 WL 169737 (M.D. Fla. Jan. 17, 2008) (reducing claimed fee to an hourly rate of $250 with an approximate multiplier of 2.25); Lapatra v. Astrue, 2008 WL 125462 (W.D.N.Y. Jan. 9, 2008) (awarding full 25 percent fee requested notwithstanding de facto hourly rate of $631.42, given that the time spent was reasonable and the attorney achieved excellent results); Wise v. Astrue, 2008 WL 110926 (S.D. Ala. Jan. 9, 2008) (awarding fee requested which yielded a de facto hourly rate of $520.55 for time spent before the court, and which was less than 25 percent of past-due benefits); Causey v. Astrue, 2008 WL 111318 (D.S.C. Jan. 8, 2008) (awarding full 25 percent fee requested which yielded de facto hourly rate of $301.25); Johnson v. Commissioner of Social Sec., 2007 WL 4614884 (M. D. Fla. Dec. 31, 2007) (awarding full 25 percent fee requested which yielded de facto hourly rate of $584.81, where counsel had over 30 years of experience representing disabled people and where case was fairly involved ); Cintron v. Commissioner of Social Sec., 2007 WL 4482573 (M.D. Fla. Dec. 18, 2007) (awarding 25 percent fee requested which yielded a de facto hourly rate of $241.93 for time spent before the court, where majority of fee available had already been recovered under section 406(a)); Garcia v. Astrue, 500 F. Supp. 2d 1239 (C.D. Cal. 2007) (awarding fee requested which yielded de facto hourly rate of $214.94 and which was less than 25 percent of past-due benefits); Blizzard v. Astrue, 496 F. Supp. 2d 320 (S.D.N.Y. 2007) (awarding fees equating to 25 percent of past-due benefits as provided in fee agreement, and refusing to calculate de facto hourly rate to justify reasonableness determination); Benton v. Commissioner of Social Sec., 2007 WL 2027320 (E.D.N.Y. May 17, 2007) (awarding reduced fee resulting in a de facto hourly rate of $447.76 where fee requested would amount to windfall at $1,334.17 per hour); Vilkas v. Commissioner of Social Sec., 2007 WL 1498115 (M.D. Fla. May 14, 2007) (awarding counsel s reduced request amounting to 5 percent of past-due benefits notwithstanding de facto hourly rate of $1,121.86); Koester v. Astrue, 482 F.Supp.2d 1078, 1083 n. 5 (E.D. Wisc. 2007) (awarding fee that with offsets equated to 25 percent of past-due benefits; court rejected argument that award should be reduced based on de facto hourly rate of $580.67, opining that such rates should be given little weight); Robbins v. Barnhart, 2007 WL 675654 (D. Kan. Feb. 28, 2007) (awarding fee resulting in de facto hourly rate of $26.91 more than counsel s standard rate as reasonable and noting that counsel worked five years on the case to obtain a favorable decision); (continued...) 7 DISCUSSION 1 2 Having reviewed the papers on file in this case in light of 3 4 Gisbrecht and its progeny, the Court concludes that counsel has not 5 met counsel s burden of showing the reasonableness of the fees 6 requested. 7 Counsel s office achieved a favorable result for Plaintiff and should 8 be compensated above normal hourly fees to recognize the risks of 9 contingent litigation. See 42 U.S.C. § 406(b); Gisbrecht, 535 U.S. at 807. See, e.g., Hearn v. Barnhart, 262 F. Supp. 2d 10 1033, 1037 (N.D. Cal. 2003) (quoting Dodson v. Commissioner of Social 11 Security, 2002 WL 31927589 (W.D. Va. Oct. 22, 2002): Congress has 12 indicated the permissibility, within limits, of rewarding attorneys 13 for assuming the risk of going uncompensated for representing Social 14 Security claimants. ). 15 Plaintiff recovered is large in comparison to the amount of time 16 spent on the case by counsel s office. However, the $100,816.50 in past-due benefits 17 18 Counsel reports that since 1980 he has practiced exclusively See Motion, p. 12. Counsel 19 in the area of Social Security law. 20 argues that the value of his services should be assessed at 21 approximately $500 per hour according to hourly rates derived from 22 23 24 25 26 27 28 5 (...continued) Jakob v. Barnhart, 2006 WL 3707888 (N.D. Cal. Dec. 14, 2006) (awarding amount sought yielding de facto hourly rate of $603.28 where counsel s standard hourly rate was $475.00); Briem v. Barnhart, 2006 WL 3374955 (W.D.N.Y. Nov. 17, 2006) (awarding fees equating to 25 percent of past-due benefits as provided by the fee agreement, noting time and effort counsel expended at the administrative level and counsel s level of experience in finding the fee request reasonable; the court did not mention the de facto hourly rate of $612.50 for time spent before the court). 8 1 the 2007 Survey of Law Firm Economics - Consolidated Metropolitan 2 Analysis - San Francisco - Oakland - San Jose, California. 3 Motion, p. 12; Exhibit E filed with the Motion. 4 counsel s argument, rates other than the normal hourly rates of 5 social security counsel do not materially aid the Court s assessment 6 of reasonableness. See Gisbrecht, 535 U.S. at 808 (the hours spent by 7 counsel representing the claimant and counsel s normal hourly 8 billing charge for noncontingent-fee cases may aid the court s 9 assessment of the reasonableness of the fee yielded by the fee See Contrary to 10 agreement. ); see also Ellick v. Barnhart, supra, 445 F. Supp. 2d at 11 1173 n.18 (this Court previously discussing the same issue); 12 Grunseich v. Barnhart, supra, 439 F. Supp. 2d 1034, n.3 (rejecting 13 reliance on surveys of this type); but cf. Cherry v. Astrue, Case No. 14 EDCV 05-393-E, Opinion and Order Granting in Part Counsel s Motion 15 for Attorney Fees Pursuant to 42 U.S.C. Section 406(b), filed 16 December 3, 2007 (this Court adopting a standard or prevailing hourly 17 rate of $250 for counsel in similar cases involving section 406(b) 18 fee requests); Wood v. Astrue, Case No. CV 01-7622-E, Order Granting 19 in Part Counsel s Motion for Attorney Fees Pursuant to 42 U.S.C. § 20 406(b), filed June 11, 2007 (same). 21 22 Counsel spent 22.25 hours representing Plaintiff before the 23 Court. See Motion, p. 11; Exhibit D filed with the Motion. If 24 compensated at $500 per hour, counsel would receive $11,125.00 for 25 time spent before the Court. 26 $16,302.97 (i.e., $25,204.13 - $5,300 in Section 406(a) fees - 27 $3,601.16 presumptive EAJA award), is reasonable to compensate him 28 for the contingent risk in this case. Counsel asserts that his fee request of 9 While the contingent risk in the present case should be 1 2 compensated reasonably, it should not be compensated as richly as 3 counsel suggests. 4 counsel suggests would not be faithful to Gisbrecht. 5 at 808 ( If the benefits are large in comparison to the amount of 6 time counsel spent on the case, a downward adjustment is . . . in 7 order ). 8 the amount of benefits now owing, and the issues briefed in the 9 summary judgment motion were neither novel nor complex.6 Under the circumstances of this case, to do as See Gisbrecht Counsel spent very little time on the case in comparison to 10 11 The Court finds that a downward adjustment from a full 12 contingency fee award is required in this case to arrive at a fee 13 that is reasonable for the services rendered. 14 case law, and after considering the nature of the contingent risk and 15 the substantial benefits obtained for Plaintiff, the Court finds that 16 a fee of $13,906.25 is a reasonable fee for the representation of 17 Plaintiff before this Court under Gisbrecht and the fee agreement 18 between counsel and Plaintiff. After surveying the This award reasonably represents 2.5 19 20 21 22 23 24 25 26 27 28 6 Counsel does not argue that any of the issues raised in Plaintiff s complaint or motion for summary judgment were particularly novel or complex, nor could counsel persuasively so argue. 10 1 times an hourly rate of $250 for counsel7 (or a de facto hourly rate 2 of $625). 3 Jul. 22, 2004) (awarding fee that was roughly 1.01 times counsel s 4 normal hourly rate for counsel s time spent before the court, where 5 past-due benefits exceeded $100,000); Wallace v. Barnhart, 2004 WL 6 883447 (N.D. Iowa Apr. 22, 2004) (awarding fee that was 1.25 7 counsel s normal hourly rate); Hearn v. Barnhart, 262 F. Supp. 2d at 8 1035 (awarding fee that was roughly 1.5 times counsel s normal hourly 9 rate, where past-due benefits exceeded $100,000, and where claimant See Brannen v. Barnhart, 2004 WL 1737443 (E.D. Tex. 10 alleged a variety of ailments not susceptible to clear and 11 straightforward forms of proof); Mitchell v. Barnhart, 376 F. Supp. 12 2d 916, 923 (S.D. Iowa 2005) (awarding fee that was 1.64 times 13 counsel s normal hourly rate); Coppett v. Barnhart, 242 F. Supp. 2d 14 1380, 1381 (S.D. Ga. 2002) (awarding fee that was roughly twice 15 counsel s normal hourly rate); Roark v. Barnhart, 221 F. Supp. 2d at 16 1021 (same); Ugorek v. Astrue, 2008 WL 169737 (M.D. Fla. Jan. 17, 17 2008) (awarding fee that approximated 2.25 times an hourly rate of 18 $250); Ogle v. Barnhart, 2003 WL 22956419 (D. Me. Dec. 12, 2003) 19 20 21 22 23 24 25 26 27 28 7 Although counsel has not reported any reliable evidence to establish his standard hourly rates, in similar cases the Court has chosen a standard or prevailing hourly rate of $250 for counsel (multiplied by a factor of 2.5 for a de facto hourly rate of $625). See, e.g., Wood v. Astrue, Case No. CV 01-7622-E, Order Granting in Part Counsel s Motion for Attorney Fees Pursuant to 42 U.S.C. § 406(b) filed June 11, 2007; see also Gisbrecht, 535 U.S. at 808 (counsel s normal hourly billing rates can aid court s interpretation of reasonableness); Hodges-Williams v. Barnhart, 400 F. Supp. 2d 1093, 1099-1100 (N.D. Ill. Dec. 6, 2005) (reducing fees to a de facto hourly rate judge deemed reasonable based on judge s own experience in private practice and with the court); Van Lewis v. Barnhart, 2004 WL 3454545 *1 (W.D. Va. Jun. 11, 2004) (reducing fees to de facto hourly rate generally approved by court in noncontingency fee cases). 11 1 (awarding fee that was 2.5 times counsel s normal hourly rate, where 2 past-due benefits exceeded $100,000 and issues litigated were not 3 complex); Van Nostrand v. Barnhart, 2005 WL 1168428 (W.D. Tex. May 4 12, 2005) (same); cf. Yarnevic v. Apfel, 359 F. Supp. 2d 1363, 1365- 5 66 (N.D. Ga. Feb. 18, 2005) (awarding fee that was roughly 2.85 times 6 counsel s standard hourly rate, where past-due benefits exceeded 7 $100,000); Droke v. Barnhart, 2005 WL 2174397 (W.D. Tenn. Sep. 6, 8 2005) (awarding fee that was roughly 5.54 times counsel s normal 9 hourly rate where counsel achieved exceptional results); Claypool 10 v. Barnhart, 294 F. Supp. 2d 829, 830 (S.D. W. Va. 2003) (awarding 11 fee that was roughly 5.73 times counsel s normal hourly rate, where 12 past-due benefits totaled almost $200,000, and counsel faced 13 difficulties with the case and went through four levels of review); 14 and Whitehead v. Barnhart, 2006 WL 681168 (W.D. Mo. Apr. 7, 2006) 15 (awarding fee that was roughly 6.55 times counsel s normal hourly 16 rate, where counsel argued novel, case-specific and risky position 17 and past-due benefits exceeded $100,000). 18 As in Ellick, the Court acknowledges the regrettable 19 20 imprecision of its analysis. After Gisbrecht, counsel and their 21 clients cannot predict with any degree of certainty what courts will 22 award as reasonable fees under section 406(b), particularly where 23 the benefits are large in comparison to the amount of time spent by 24 counsel. 25 appellate courts, district courts cannot have any degree of 26 confidence that their section 406(b) awards will be consistent with 27 what the law intends. 28 /// And, absent further guidance from Congress or from the 12 1 CONCLUSION 2 3 The Motion is granted in part. Section 406(b) fees are 4 allowed in the amount of $13,906.25 to be paid out of past due 5 benefits. The parties shall proceed accordingly. 6 7 IT IS SO ORDERED. 8 9 DATED: February 7, 2008. 10 11 12 ________________/S/_________________ CHARLES F. EICK UNITED STATES MAGISTRATE JUDGE 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 13

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