Dunnigan v. Commissioner, Social Security Administration
Filing
45
FINDINGS and RECOMMENDATION - Plaintiff's Amended Motion 36 for Attorney Fees Pursuant to 42 USC sec 406(g) should be GRANTED in part and a sec 406(g) fee of $11,874.00 should be awarded to Dunnigan's attorney. This matter will be referred to a district judge. Objections, if any, are due on or before 1/6/10. If objections are filed, a response is due within 14 days of being served with a copy of the objections. Signed on 12/23/09 by Magistrate Judge John V. Acosta. (peg)
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ICT C O U R T IN T H E UNITED STATES DISTR F O R T H E DISTRICT O F OREGO N
J I M B. DUNNIGAN, Plaintiff,
CV 07-1645-AC FINDINGS AND RECOMMENDATION
v.
M I C H A E L V. A S T R U E C o m m i s s i o n e r o f S o c i a l Security, Defendant.
A C O S T A , M a g i s t r a t e Judge:
Introduction
d e d Unopp Before t h e c o u r t is P l a i n t i f f ' s A m e n o s e d M o t i o n F o r A t t o r n e y ' s fees p u t e r p r e t and a p p l y t h e s t i l l - e v o l v i n g r s u a n t to standard
u i r e s this c o u r t t o in 42 U.S.C. § 406(b). T h e motion req
l S e c u r i t y c a s e s u n d e r § 406 for awarding attorney fees in Socia
d ( b ) . B a s e d o n the factors e s t a b l i s h e
7 8 9 ( 2 0 0 2 ) , and e x p l a i n e d i n by Gisbl'echt v. Barnhart, 535 U.S.
CraJljordv. Astrue, ~F.3d~,
ld b e granted in part and fees
, 2 0 0 9 ) ( e n bane), t h e motion s h o u 2009 W L 3617989 (9th Cir. Nov. 4 ATION FINDINGS AND R E C O M M E N D 1
awarded in the amount o f $ I I , 8 7 4 . 0 0 .
Background
A.
T h e D i s a b i l i t y Case. Dunnigan alleged disability based on a combination o f impairments, including post-traumatic
stress disorder ("PTSD"), depression, osteoarthritis, obesity, and skin disorders. On July 29, 2005, the Commissioner denied the D u n n i g a n ' s request for Disability Insurance Benefits ("DIE") under Title II o f the Social Security Act, 42 U.S.C. §§ 401-403 (2008). The Commissionerdetennined that the Dunnigan did not qualifY as disabled at step three. (Tr. 53.) Dunnigan filed a request for reconsideration o fthe Commissioner's decision, which request the Commissioner denied on January 10, 2006. (Tr. 62.) On March 9, 2006, Dunnigan filed a request for hearing before an
Administrative L a w Judge ("ALJ") (tl'. 70), who, after hearing, issued a decision on June 2 2 , 2 0 0 7 , finding Dunnigan n o t disabled. (Tr. 6, 11-13.) Dunnigan sought rehearing o f the A L J ' s decision before the Appeals Council, but the Council denied his request on September 17, 2007. (Tr. 2.) On November I , 2007, Dunnigan filed this lawsuit seeking judicial review o f the final decision denying his application for DIE. Important to the instant motion is that the parties agreed that the ALJ erred; they disagreed, however, over the proper remedy on remand. Also important is t h a t their d i s a g r e e m e n t c e n t e r e d o n l y o n w h e t h e r D u n n i g a n ' s c o n d i t i o n s a t i s f i e d a l i s t i n g requirement. The Commissioner argued that the record did not require a finding o f disability and that the matter should be remanded for further proceedings to allow the ALJ to reevaluate the testimony o f the medical expert with regard to the Listings, the importance o f the Veterans' Administration rating, and his findings at step five o f the sequential evaluation process. Dunnigan contended that he met a listing requirement at step three and thus was disabled, and that the court FINDINGS AND R E C O M M E N D A n O N 2
ies' dispute centered on the therefore should remand the matter for an award o f benefits. The part proper evaluation o f Dr. Robert D a v i s ' s medical testimony and whethe r Dunnigan did in fact meet
12.04. ( P l a i n t i f f s Opening the listing requirement at step three under subsection (C)(2) o f Listing o f § 1204 i f Du B r i e f 8 - l 0 . ) Dr. Davis testified that Dunnigan satisfied the "c" criteria (Tr. 12). e x p o s e d to m a n y p e o p l e , s u r p r i s e s a n d c h a n g e s , o r a d d i t i o n a l s t r e s s . " mmissioner uses to Familiar to Social Security practitioners is the five-step process the Co Social Security Act ("SSA" determine whether individuals qualify as disabled under Title II o f the is relevant to the § 406(b) or "Act"). 20 C.F.R. 404.1 520(a)(1). Only step three o f that process analysis because D u n n i g a n ' s argument here was that he was disabled un i f the claimant meets the criteria o f a n impairment listed in 20 C.F.R. Pa der this step. At step three, nnigan " w a s
rt 404, Subpart P, Appendix
the Commissioner does not 1, the claimant is found disabled, see 20 C.F.R. § 404.1 520(a)(4)(iii), its. Appendix 1 is entitled proceed to steps four and five, and the claimant is to receive benef f c o n d i t i o n s that constitute "Listing o f Impairments" and contains fifteen general categories o impairments, followed by criteria to determine whether a claimant's pa or more o f the listed impairments, thus rending the claimant "disabled" 404, Subpt. P, A p p . ! . i x , entitled " m e n t a l Specifically relevant to Dunnigan's condition is § 12.00 o f the Append disorders" and which identifies the evidentiary sources, categories o f m ental conditions, and criteria r t i c u l a r c o n d i t i o n meets o n e under the Act. 20 C.F.R. Pt.
t "disabled" under the Act. relevant to determining whether a mental disorder renders a claiman tive Disorders", which are Dunnigan's case turned on application o f § 12.04, entitled "Affec p a r t i a l m a n i c o r depressive "[c]haracterized by a disturbance o f mood, accompanied by a full or le psychic life; it generally syndrome. M o o d refers to a prolonged emotion that colors the who FINDINGS A N D R E C O M M E N D A T I O N 3
e cir n . " S e c t i o n 12.04 t h e n d e s c r i b e s t h involves either depression o r elatio e a "disability" u a n affective d i s o r d e r w i l l c o n s t i t u t
c u m s t a n c e s under which
eads: n d e r t h e Act, a n d i n r e l e v a n t p a r t r
quirements i n these disorders is met w h e n the re The required level o f severity for d. n t h e r e q u i r e m e n t s i n C are satisfie b o t h A and B are s a t i s f i e d , o r w h e
****
least 2 y e a r s ' o f a clu'onic affective disorder o f at C. Medically d o c u m e n t e d history o b a s i c work a m i n i m a l l i m i t a t i o n o f ability to d duration t h a t has c a u s e d m o r e than chosocial ently attenuated by medication orpsy ivities, w i t h s y m p t o m s or s i g n s curr act support, a n d o n e o f t h e following: t 1. Repeated episodes o f decompensa or ion, e a c h o f e x t e n d e d d u r a t i o n ;
a t has r e s u l t e d i n s u c h m a r g i n a l 2. A residual disease process th ease i n m e n t a l d e m a n d s o r change a d j u s t m e n t t h a t e v e n a m i n i m a l incr dicted to cause the individual to in t h e environment would be pre decompensate; o r r s ' inability to function outside a 3. C u r r e n t history o f 1 o r more yea nt, w i t h an i n d i c a t i o n o f c o n t i n u e d h i g h l y s u p p o r t i v e l i v i n g arrangeme n e e d for s u c h a n a r r a n g e m e n t . . 20 C.F.R. Pt. 404, Subpt. P, A p p . ! ons in which it d its Finding and Recommendati M a r c h 2 4 , 2 0 0 9 , this court issue On ). S p e c i f i c a l l y , i s a b i l i t y u n d e r L i s t i n g § 12.04 ( C ) ( 2 a t t h e r e c o r d r e q u i r e d a finding o f d concluded th this court found that des that et forth by t h e SSA, the court conclu x t o f t h e disability r e v i e w process s In t h c c o n t e fore the ALJ that disability. D r . D a v i s t e s t i f i e d b e the r e c o r d m a n d a t e s a f i n d i n g o f avis's g 12.04. T h e A U interpreted Dr. D s a t i s f i e d s u b s e c t i o n (C)(2) o f U s t i n [Dunnigan] a n t was capable ly tailored w o r k e n v i r o n m e n t , C l a i m ding to m e a n t h a t i n a n appropriate fin SSA. r y t o t h e f r a m e w o r k s e t forth b y the j o b duties. T h i s is, however, contra o f performing om the R F C a n d sis occurs prior to a n d separate fr t h a t framework, t h e listings analy al In solely to the [Dunnigan's] medic lysis. T h e listings are addressed vocational ana d disabled and equaling a listing, a c l a i m a n t is foun dition and, by m e e t i n g or medically con m a d e his s t a t e m e n t ent. T h e context i n w h i c h D r . D a v i s is thus p r e c l u d e d f r o m a l l employm n t i a r y record. clusion is s u p p o r t e d by the evide rs its meaning clear and this con rende ATION F I N D I N G S AND R E C O M M E N D 4
e n t s e q u e n t i a l step [Dunnigan] meets Listing 12.04 and is thus disabled and all subsequ a n a l y s i s i s r e n d e r e d moot. Mar. 24, 2009). This court Dunnigan v. Astrue, CV 0 7 - l 6 4 5 - A C , 2009 W L 1065070, at *9 (D. Or. d for f u r t h e r a d m i n i s t r a t i v e a c c o r d i n g l y r e c o m m e n d e d t h a t the C o m m i s s i o n e r ' s m o t i o n t o r e m a n proceedings b e denied and that the D u n n i g a n ' s request to remand the c a s e for a n a w a r d o f b e n e f i t s m e n d a t i o n s , and
a n d Recom be granted. The Commissioner did not filed objections to the Findings Dunnigan submitted no further briefing o n the merits.
B.
T h e F e e Request. c o u r t ' s Findings and On April 20, 2009, U.S. District Judge Michael Mosman adopted this
R e c o m m e n d a t i o n , a n d o r d e r e d t h i s m a t t e r r e m a n d e d for a n a w a r d o f b e
n e f i t s to D u n n i g a n . O n June to Justice Award ("EAJ A")
s 3, 2009, D u n n i g a n ' s attorney submitted a n application for Equal Acces
. The Commissioner did not attorney fees in the amount o f $ 7 ,016.93, pursuant to 28 U.S.C. § 2412 o r n e y fe object. O n June 3, 2009, this court issued a n Order awarding EAJA att requested, $7,016.93. r attomey fees under On July 30, 2009, D u n n i g a n ' s attorney filed his unopposed motion fo this case before this c o u r t . ' 42 U.S.C. § 406(b),' seeking $22,614.25 for his work performed in ed Memorandum In Support Subsequently o n that same day, D u n n i g a n ' s attorney filed the Amend es in the full amount
a t t o r n e y , n o t the In attorney fee motions u n d e r § 406(b), the real party in interest is the claimant. Gisbrecht, 535 U.S. at 798 n.6.
I
he E A J A and § , In Social Security cases, attorney fees may b e awarded under both t Gisbrecht, 535 U.S. a t 4 0 6 ( b ) , b u t " a n E A J A a w a r d o f f s e t s a n award u n d e r S e c t i o n 4 0 6 ( b ) . " ey fees in those cases 796. Congress enacted the E A J A in 1980 to permit recovery o f attorn ally justified.'" Gisbrecht, where " t h e G o v e r n m e n t ' s position in t h e litigation was not 'substanti termined by t h e t i m e spent 535 U.S. at 796, citing 28 U.S.C. § 2412(d)(l)(A). E A J A fees are de 0. Gisbrecht, 535 U.S. at a n d t h e a t t o r n e y ' s h o u r l y rate, w h i c h r a t e i s s t a t u t o r i l y c a p p e d $ 1 2 5 . 0 796, citing 28 U.S.C. § 24l2(d)(2)(A). FINDINGS AND RECOMMENDATION 5
p p o r t " ) w h i c h increased t o of Plaintiff's Motion for Attorney Fees ("Amended P I ' s Memo in Su $23,748.00 the amount o f § 406(b) fees sought. Dunnigan and his attorney entered into a contingent fee agreement in wh to pay his attorney the greater o f twenty-five percent o f any past -due be i c h D u n n i g a n agreed
nefits received o r any EAJ A
fee of$23,748.00, which he attorney fee award obtained. (Tr. 5 8 - 5 9 Y Dunnigan's counsel seeks a represents to be twenty-five percent o f his client's past-due benefit awar d , a l t h o u g h counsel p r o v i d e d
o w e v e r , based o n c o u n s e l ' s no precise figure o f the amount o f past-due benefits to be awarded. H e n t o f the p a s t - d u e b e n e f i t s representation that the requested $23,748.00 fee is twenty-five perc is $94,992. Dunnigan will receive, the amount o f past-due benefits to be awarded asonable hourly rate Dunnigan's attorney supports his fee request by first establishing the re s normal hourly rate for nonhe proposes to apply to the w o r k performed. Rather than begin with hi
B a r 2 0 0 7 Economic S u r v e y contingent cases, however, counsel instead refers to the Oregon State
("Survey"), used by the j u d g e s in this district as the "initial benchmark
" for d e t e r m i n i n g r e a s o n a b l e
e C o u r t R e g a r d i n g Attorney hourly rates applicable to attorney fee awards. See "Message From Th F e e P e t i t i o n s , " a v a i l a b l e at www.ord.uscourts.gov/attorney_fee_statem ent. The Survey repOlts that
u r : \ O r e g o n State B a r 2 0 0 7 a t t o r n e y s p r a c t i c i n g i n " o t h e r a r e a s " i n P o r t l a n d average $ 2 4 2 p e r h o e Index-Urban (CPIU) data, Economic Survey at 31. Relying o n the most recent Consumer Pric
as an exhibit in D u n n i g a n ' s attorney subsequently filed his fee agreement separately, support o f the pending motion. See Dkt. No. 44.
3
ivil litigation " O t h e r " i n c l u d e s all l e g a l p r a c t i c e s e x c l u d i n g b a n k m p t c y , b u s i n e s s , c /environmental law, tax, (insurance defense and personal injury), criminal, real estate/land use general, and worker's compensation. See Survey at 29-31.
4
FINDINGS A N D R E C O M M E N D A T I O N
6
ltiplier o f 1.0 I . 5 (Amended counsel adjusted this hourly rate to account for inflation, applying a mu urvey hourly rate, the result P l f s . Memo. in Support 3.) Applying the 1.01 multiplier to the $242 S the basis rate for use in his is a n adjusted average hourly rate for Portland attorneys o f $244 and further calculations. (Amended P l f s Memo. in Support 3.) C o u n s e l n e x t i d e n t i f i e s factors w h i c h h e b e l i e v e s warrants a n upward ad j u s t m e n t o f t h i s basic
S o c i a l S e c u r i t y claimants. a v e r a g e h o u r l y rate, a l l o f w h i c h p e r t a i n t o the r i s k o f r e p r e s e n t i n g onsider in determining the Specifically, he identifies two types o f risk he asks this court to c f o r w h i c h t h e attorney n e v e r r e a s o n a b l e n e s s o f t h e fee sought. F i r s t , " [ c ] a s e s a n attorney l o s e s a n d id as t h e result o f an E A J A gets back at all," a n d second, cases in whiCh the attorney is underpa award. ( P l f s . Supplemental Memo. in Support 2.) T o a c c o u n t f o r t h e s e t w o c a t e g o r i e s o f risk, D U l m i g a n ' s c o u n s e l e m p l o y s several m u l t i p l i e r s .
i s w i t h t h e S u r v e y ' s statistic First, he address the risk o f not getting paid at all and statts his analys ters, but derive 17% o f their that "Portland attorneys spend 15% o f their time o n contingency mat o f a multiplier o f 17/15 here. income from such matters.,,6 H e contends that this statistic requires use n l y a 3 6 % chance o f w i n n i n g (Amended PI's. Memo. in Support 3.) H e states that because there is o lso should be applied to the benefits for a claimant, a "contingency multiplier" o f 2.78 (100/36) a
7 l c u l a t e s a t $768.76 p e r h o u r $244.00 average hourly rate. Applying both multipliers, counsel ca
CPIU was "In October o f 2 0 0 7 , w h e n the 2007 was mailed out to attorneys, the ailable, November 2008 is 208.396, and the CPIU for the m o s t recent month for which data is av 212.425." Amended P l f s . Memo. in Support 3.
5
y where Presumably counsel was referring to the 1998 Oregon State Bar surve urvey, upon whiCh he S contingency matters were one subject o f the survey because the 2007 e Oregon State Bar 1 9 9 8 Economic Survey at 35. relies, does not address contingency matters. Se
6
a t o s u p p o r t the I t i s u n c l e a r t o t h e c o u r t from w h a t s o u r c e c o u n s e l 0 b t a i n e d h i s d a t r t y - s i x p e r c e n t chance o f statistic t h a t attorneys l i t i g a t i n g S o c i a l Security claims have only a t h i
7
FINDINGS AND RECOMMENDATION
7
($244.00 x 2.78 x 17/15.) the effective hourly rate for Portland attorneys practicing Social Security law in order to "properly compensate" them for the contingency risk o f these cases. (Amended PI's. Memo. in Support 3.) To validate these multipliers, Dunnigan's attorney offers evidence o f his total loss per contingency case to establish what he must make per year to account for his per-case loss. (PI's. Supp. Memo. 3.) He provides " a rough estimate" o f the average number o f hours he spends on each Social Security case, estimating forty hours at the district court level and eighty hours for an appeal to the Ninth Circuit. ( P I ' s Supp. Memo. 2 n.2, 3.) He bases this estimate o n his experience o f having "written hundreds o f Social Security briefs and the hours spent usually are between thirty hours and fifty five [sic] hours i n total." (PI's. Supp. Memo. 2 n.2.) Dunnigan's counsel then calculates the amount he must make in each case "to break even" by multiplying the $244 reasonable hourly rate by the average 40 hours spent per case, totaling $9,760 per case. (PI's. Supp. Memo 2.) He estimates that he has a 20% loss rate o f the estimated forty Social Security cases he litigates per year. (PI's. Supp. Memo. 2-3.) Multiplying the forty cases he takes per year by .2, he estimates his total annual loss at the district level to be $78,080. (PI's. Supp. Memo. 3.) Counsel estimates that he appeals five o f t h o s c losses to the Ninth Circuit, and loses four o f them. (PI's. Supp. Memo. 3.) From this, he calculates the total he must make per year in order to account for his loss before the Ninth Circuit to be $29,280.' Counsel estimates that
winning benefits for their claimants. Counsel states that the data is "based on statistics used in the Supreme Court appeal in Gisbrecht." (Amended Plf's. Memo. in Support 3 n. 3.) However, Gisbrecht contains no such data o r reference, and counsel's b r i e f contains no page cite to the G i s b r e c h t o p i n i o n o n t h i s point. Though counsel did not fully explain his methodology, it appears his calculation on this point is incorrect because he mistakenly subtracts $9,760 from his total to account for the one
8
FINDINGS AND R E C O M M E N D A T I O N
8
the total amount he must m a k e p e r year to account for cases where h e never gets paid is $107,360 - $29,280 at the Ninth Circuit level, plus $78,080 at the district court level. (PI's. Supp. Memo. 3.) The second category o f risk are EAJA attorney fee awards, which Dunnigan' attorney characterizes as a " l o s s " because those fee awards underpay him for his services. (PI's Supp. Memo. 3.) He calculates the total h e must make p e r year to account for this underpayment by first estimating the average E A J A hourly rate to b e $175.00. (PI's Supp. Memo. 2.) Multiplying the reasonable hourly rate by forty, his average hours spent per case, h e calculates at $2,760 "the loss incurred b y an attorney in a typical EAJA case." (PI's Supp. Memo. 2.) H e then estimates that out o f the forty Social Security cases he takes per year, he is underpaid in twenty-nine o f them. Thus, multiplying twenty-nine by the typical $2,760 EAJA fee "loss," he calculates his total loss per year to equal $80,040. (PI's Supp. Memo. 3.) Finally, D u n n i g a n ' s counsel estimates what he must make per case in §406(b) fees in order to be fairly compensated, taking into account both the risk o f not getting paid at all and the risk o f being underpaid with an E A J A award. He estimates that h e is successful in obtaining an EAJA award in 80% o f t h e cases he litigates. O f those cases, he estimates that §406(b) fees are awarded in 10% o f them. (PI's. Supp. Memo. 3.) He then multiplies 40, the total cases he takes per year, by .08 (.8 x .1), to calculate t h e total cases per year where §406(b) are awarded, equaling 3 . 2 : (PI's. Supp. Memo. 3.) Counsel then divides $187,400, which represents the $80,040 annual loss from E A J A underpayment plus the $107,360 annual loss from not getting paid at all, by a 3.2 multiplier
case he wins per year before the N i n t h Circuit. (PI's. Supp. Memo. 3.) This is in error, however, because his calculation to determine his annual loss before the Ninth Circuit (4 x $9.760 = $39,040) already excludes the one case he wins annually.
9
Counsel provided no specific explanation for the 3.2 multiplier. 9
FINDINGS A N D R E C O M M E N D A T I O N
for a sum o f $58,562.50, the total §406(b) fees per case he needs to make to p u t him ' o n equal footing [with] those attorneys o f similar reputation and skill." (PI's. Supp. Memo. 3.) Ultimately, he notes, the fee requested here, $23,748.00, equates to an hourly rate o f $ 5 8 2 . 2 0 for the 40.79 hours he worked on Dmmigan's court case. (PI's. Supp. Memo. 4.)
Legal Standard
A.
The Statute. The basic standard is set by statute. Attorney fee awards for Social Security cases are
governed by 42 U.S.C. § 406(b), which provides in relevant part: (b) Attorney fees
( I )(A) 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 a n d allow as p a r t o fitsj u d g m e n t a r e a s o n a b l e f e e f o r such representation, not in excess o f 2 5 p e r c e n t o fthe total o fthe past-due benefits to which the claimant is entitled by reason o f such judgment, and the Commissioner o f Social Security may, notwithstanding the provisions o f section 405(1) o f this title, but subject to subsection (d) o f this section, certify the amount o f such fee for payment to such attorney out of, and n o t in addition to, the amount o f such past-due benefits. In case o f any such judgment, no other fee may be payable or certified for payment for such representation except as provided in this paragraph.
(Italics s u p p l i e d . )
B.
C o n t r o l l i n g Cases. Two cases control application o f the § 406(b) standard. In Gisbrecht v. Barnhart, the
Supreme Court undertook t o clarify the statutory "reasonable fee" standard by taking on the question o f the "appropriate starting point" for judicial determinations o f fee requests because o f a "division among the Circuits on the appropriate method o f calculating fees under § 406(b)." Gisbrecht,535 U.S. at 792, 799. The Court reversed fee awards made by district court j u d g e s who applied
FINDINGS AND R E C O M M E N D A T I O N
10
"lodestar" methodology to evaluate and determine three fee requests under § 406(b)10, and it held that § 406(b) did not displace o r override contingent-fee agreements. To the contrary, lower courts are to approach § 406(b) fee determinations by looking tlrst to the contingent-fee agreement and then "testing it for reasonableness." Gisbrechf, 535 U.S. at 808.
Gisbrechf 's rationale is important context for evaluating the § 406(b) fee request in this case.
Writing for the majority, Justice Ginsburg tlrst observed that§ 4 0 6 ( b ) ' s "reasonable fee" requirement could be measured by a lodestar calculation, but the s t a t u t e ' s language did not exclude contingent-fee agreements. Gisbrechf, 535 U.S. at 799-800. T o the contrary, contingent-fee contracts "are the most common fee arrangement between attorneys and Social Security claimants." Id. at 800. This fee a1'l'angement is consistent w i t h the circumstances existing in 1965 when Congress enacted the amendments that contained § 406(b), before the lodestar approach "gain[ed] a tlrm foothold [in] the mid-1970's". Gisbrechf, 535 U.S. at 801. This legislative history made i t "unlikely" that Congress intended § 406(b) to incorporate " a lodestar method courts did not develop until some years later."
Gisbrechf, 535 U.S. at 806.
The operation o f § 406(b) also informed the proper test for determining a fee under its language. Other fee award statutes shift to the loser the prevailing p a r t y ' s attorney fee, but § 406(b) fee awards instead " a r e payable from the successful p a r t y ' s recovery." Gisbrechf, 535 U.S. at 802. Reviewing § 4 0 6 ( b ) ' s language and rationale for enacting the provision as an amendment to the SSA, the Court concluded that Congress clearly intended to regulate the contingent-fee arrangements between practitioners and claimants to ensure that lawyers did not negotiate "inordinately large fees
10 T h e Gisbrechf o p i n i o n decided three separate c a s e s c o n s o l i d a t e d during appeals to the N i n t h Circuit.
F I N D I N G S AND R E C O M M E N D A T I O N
II
for representing claimants." Gisbrecht, 535 U.S. at 804. Hence, "Congress provided for ' a reasonable fee, not in excess o f 2 5 percent o f accrued benefits' [.J" Jd. Congress also acknowledged, evidence that attorneys sometimes did not receive notice o f their clients' bcnefits award nor, in fact, receive payment for their scrvices. Consequently, with § 406(b) "Congress has thus sought to protect claimants against 'inordinately large fees' and also to ensure that attorneys representing successful claimants would not risk 'nonpayment o f [appropriate] fees.'"
Gisbrecht, at 805. The Court
concluded by declaring "contingent-fce agreements as the primary means by which fees are set for successfully representing Social Security claimants in court," id. at 807, the Court The Court then turned to the rcspective obligations o f the court and the attorney in a § 406(b) fee request. First, the c l a i m a n t ' s attorney "must show that the fee sought is reasonable for the services r e n d e r e d . "
Gisbrecht, at 807. Important on this point is that a twenty-five percent
contingent- fee award is not automatic or even presumed; "the statute does not create any presumption in favor o f the agreed upon amount." Jd. a t 807 n.17. Second, the court is to review contingent-fee arrangements "as an independent check, to assure that they yield reasonable results in particular cases. Jd. at 807. The statute requires " a n atlirmative judicial finding that the fee allowed is 'reasonable"'. Id. (citation omitted). Upon this foundation the Court established the factors lower courts are to consider in determining § 406(b) fee requests. To test the contingcnt-fee agreement for reasonableness, courts may reduce a fee based on "the character o f the representation" and the "results the representative achieved." Gisbrecht, 535 U.S. at 808. Reduction also is proper i f the attorney is rcsponsible for delay in the court proceeding, bccause that delay, where a claimant is awarded benefits, would increase the period o f time over which past-due benefits are awarded. Id. Such a reduction is
FINDINGS AND R E C O M M E N D A T I O N
12
appropriate so that " t h e attorney will not profit from the accumulation o f bcnefits during the pendcncy o f the case i n court." ld. Reduction also is appropriate where the "bcnefits are largc in comparison to the amount o f time counsel spent on the case" to avoid "windfalls" to attorneys. ld. Regarding this factor, the court may require a requesting attorney to submit a record o f the hours s p e n t o n the c a s e a n d a s t a t e m e n t o f t h e l a w y e r ' s " n o r m a l h o u r l y b i l l i n g c h a r g e f o r n o n c o n t i n g e n t - f e e cases," as " a n aid to t h e c o u r t ' s assessment o f the reasonableness o f the fee yielded by the fee a g r e e m e n t [ . ] " l d . I n c l o s i n g , the C o u r t o b s e r v e d t h a t a p p l i c a t i o n o f t h e s e f a c t o r s w o u l d n e c e s s a r i l y depend on district court j u d g e s ' familiarity " i n a wide variety o f contexts" with making reasonable determinations. ld. In C r a l l j o r d v. As/rue, _ F.3d _ , 2 0 0 9 WL 3617989 (9th Cir. Nov. 4, 2009) (en banc),
the N i n t h C i r c u i t a d d e d i t s c o n s t r u c t i o n o f G i s b r e c h / a n d § 4 0 6 ( b ) . T h e r e , the N i n t h C i r c u i t reviewed § 406(b) fee awards i n three cases and determined that the district courts had not followed Gisbrech/ 's mandate. In each case the claimant and the attorney had entered into a contingent-fee agreement under which the attorney would be paid twenty-five percent o f any past-due benefits awarded to the claimant. Gisbrech/, 2009 WL 3617989, at * I . In each case the attorney sought a fee less than twenty-five percent o f the past-due benefit but the court awarded a fee "significantly lower" than the fee requested. ld. The Ninth Circuit reversed the district court in each case because the judges had premised their fee analysis on the lodestar method rather than on the ' ' ' p r i m a c y o f lawful attorney-client fee agreements. '" ld. at *6. Reiterating Gisbrech/ 's directive, the Ninth Circuit stated that the courts must assure the reasonableness o f Social Security case fee awards by beginning with the fee agreement and then determining whether that amount should be reduced, not deciding, as the district
FINDINGS AND RECOMMENDATION
13
courts had donc, "whether the lodestar amount should be enhanced." Jd. The district courts' approach "plainly failed to respect the 'primacy o f lawful attorney-client fee agreements.'" lei. (quoting Gisbrecht, 535 U.S. at 793). The Ninth Circuit expanded on Gisbrecht's discussion o f the unique character o f § 406(b) among fee statutes, noting primarily that "[I]odestar fees will generally be much less than contingent fees because the lodestar method tends to under-compensate attorneys for the risk they undertook in representing their clients and does not account for the fact that the statute limits attorneys' fees to a percentage o f past-due benefits and allows no recovery from future benefits, which may far exceed the past-due benefits awarded." CraHiord, 2009 WL 3617989, at *7. The court observed that the district c o u r t s ' lodestar-centered awards underscored the flaw o f using that approach in § 406(b) d e t e r m i n a t i o n s : In Cr([ljiord, for example, the district court awarded 6.68% o f the past-due benefits. From the lodestar point o f view, this was a premium o f 40% o v e r the lodestar. I t secms reasonable. But from the contingent-fee p o i n t o f view, 6.68% o f past-due benefits was over 73% less than the contracted fee and over 60% less than the discounted fee the attorney requested. Had the district court started with the contingent-fee agreement, ending with a 6.68% fee would be a striking reduction from the parties' fee agreement. This difference underscores the practical importance o f starting with the contingent-fee agreement and not j u s t viewing it as an enhancement.
C n l l l i o r d , 2009 WL 3617989, at *7 (footnote omitted).
The Ninth Circuit then reinforced the factors identified in Gisbrecht which lower courts should use to determine whether a reduction from the contingent-fee amount is appropriate:
I . the character o f the representation, specifically, whether the represcntation was substandard;
2. the results the representative achieved; 3. any delay attributable to the attorney seeking the fee; and FINDINGS AND R E C O M M E N D A T I O N 14
spent o n the case" so 4. whether the benefits obtained were " n o t in proportion to the time t h a t t h e attorney d o e s n o t receive a " w i n d f a l l " . o p e r for l o w e r courts ( 0 request Cl'allford, 2009 WL 3617989, at *7. T o assess the last factor, it is pr ent o f the attorney's normal o r examine the requesting a t t o r n e y ' s record o f hours spent and a statem hourly rate, and to " c o n s i d e r the lodestar calculation, but reasonableness o f the fee." Id. (italics in original). Importantly, the N i n t h Circuit noted that Gisbrecht "did not provide a d efinitive list offactors
011/Y
as
011
a i d in assessing the
r h o w those factors should be that should be considered in determining whether a fee is reasonable o ircuit added to the Gisbrecht weighed[.]" CrOllford, 2009 W L 3617989, at *7. Indeed, the N i n t h C c factors to be considered in factors by implicitly acknowledging that complexity and risk also ar s m e t the burden to show that determining a § 406(b) fee award: determining whether the attorney ha the requested fee is reasonable m u s t be"based o n the facts o f the partic u l a r c a s e . . . . t h e d i s t r i c t court ssue t o d e t e r m i n e d h o w much
should look at the complexity and risk involved in the specific case at i
rving, the court rejected as risk the firm assumed in taking the case." Id. at *9. In so obse c u s i n g on the f i r m ' s overall "misconstruing the nature o f the risk assessment" an approach " f o r less risky for the firm. Id. I I s u c c e s s rate i n s t e a d o f t h e s p e c i f i c facts that m a k e a g i v e n c a s e m o r e o asonable fee u n d e r § 406(b), Finally, a l t h o u g h t h e d i s t r i c t c o u r t s h a v e d i s c r e t i o n t o d e t e r m i n e a r e ficall they must provide an explanation o f the reasons for a fee award, speci y , h o w t h e a w a r d relates
the N i n t h Further evidence that risk is a factor to be considered b y the courts is ensate attorneys for the risk C i r c u i t ' s observations that the lodestar method "tends to under-comp e fact that the statute limits they undertook in representing their client and does n o t account for th overy from future benefits," attorneys' fees to a percentage o f past-due benefits and allows no rec in accepting these cases, and that the attorneys in the appealed cases "assumed significant risk uld be a long court o r including the risk that no benefits w o u l d be awarded or that there wo administrative delay in resolving the cases." Id. at *7, *8.
II
F I N D I N G S AND R E C O M M E N D A T I O N
15
to the circumstances o f the particular case. Id. at *8. Discussion r m i n i n g the Gisbrecht provided the lower courts with no precise guidance for dete d in his Gisbrecht dissent: reasonableness o f fee requests under § 406(b). Justice Scalia observe eals are to make o f t o d a y ' s "I do not know w h a t the judges o f our district courts and courts o f app n g a p p r o x i m a t i n g a uniform opinion. . . . [I]t does nothing whatever to subject these fees to anythi tic: since Gisbrecht, the rule o f l a w . " Gisbrecht, 535 U.S. at 809. His dissent also was prophe dard but have produced no courts o f appeal and the district courts have attempted to apply its stan
§ 406(b). See Ellick v. consensus on the method by which to determine reasonableness under
e survey o f "decisions Barnhart, 445 F. Supp. 2 d 1166 (C.D. Cal. 2006) (discussing extensiv t t h e methods by which applying Gisbrecht to section 406(b) fee requests" and concluding tha uniform). T h e E/lick court courts determine the reasonableness o f § 406(b) attorney fees are n o t ree o f t h o s e decisions, f o u n d forty-three r e p o r t e d d e c i s i o n s , a n d d e t e r m i n e d t h a t i n t w e n t y - t h wed under the SSA statute. plaintiffs requested and were awarded the full twenty-five percent allo s awarded the plaintiffs thc Elfick, 445 F. Supp. 2d at 1168-69. In eight other decisions, the court e benefits. Id. 1170-71. In filll amount requested but less than twenty-five percent o f the past-du t h e r e m a i n i n g twelve c a s e s , t h e p l a i n t i f f s r c q u e s t e d twenty-five p e r c e nt but the courts reduced the
t in Crcll!ford, Judgc amount. Id. at 1171-72. In her majority opinion for the cn bane cour o r s that s h o u l d b e F l e t c h e r , noted t h a t " G i s b r e c h t d i d n o t p r o v i d e a d e f i n i t i v e l i s t o f f a c t ctors s h o u l d b e w e i g h e d [ . ] " considered in determining whether a fee is reasonable o r how those fa Cnll!ford, 2009 WL 3617989, at *7. C r m l f o r d i m p r o v e d u p o n G i s b r e c h t ' s standard by a c k n o w l e d g i n g tha t l o w e r courts
FINDINGS AND RECOMMENDATION
16
should consider risk when determining the appropriate amount o f § 406(b) attorney fees, but
CnIH10rd did not provide trial court j u d g e s with clearer guidance for determining the
r e a s o n a b l e n e s s o f t h e s e f e e r e q u e s t s . C n l H 1 0 r d ' s d i s s e n t i n g o p i n i o n s s u p p o r t t h i s reading. J u d g e Clifton, after disagreeing w i t h the majority's decision to simply award the fccs requested rather than to remand that determination to the trial courts in each case, found the CnIH10rd majority opinion "provides no serious explanation o f why these awards are reasonable[.]." Cra1l10rd, 2009 WL 3617989, at *9 (Clifton, J., concurring in p a r t and dissenting in part). Judge B c a ' s d i s s e n t i n g o p i n i o n o b s e r v e d t h a t the l o w e r - c o u r t j u d g e s f o l l o w e d G i s b r e c h t a n d t h a t thc
CnIH10rd majority did not, and h e stated that the lower-court j u d g e s adhered to Gisbrecht's
mandate by considering the amount o f time each attorney worked o n their respective case.
Crall:ford, 2009 W L 3617989, at * 10-11 (Bea, J., dissenting). H e described the CnIH10rd
majority reasoning as "inadequate" for justifYing reversal o f the lower court decisions.
Cra1l10rd, 2009 WL 3617989, at * 11-12 (Bea, J., disscnting).
Thus, in the wake o f G i s b r e c h t and Cra1l10rd, ambiguity remains a s to the precise standard for assessing reasonableness, including the weight a court may give the lodestar factors, when evaluating a request for § 406(b) attorncy fees. See, e.g., Crawford, 2009 W L 3617989, at
*5, *7 (discussing the proper application o f lodestar factors in determining reasonablcness after
Gisbrecht and stating that they may b e used " o n l y a s an aid") (cmphasis in original). However, Gisbrecht and CnIH10rd make clear that the § 406(b) analysis always begins with the contingent-
fee agreemcnt, and then proceeds w i t h an evaluation o f the a g r e e m e n t ' s reasonableness and an assessment o f whether any reduction is appropriate by applying the factors identified in
Gisbrecht to the circumstances o f the specific case. To those factors the trial courts in the Ninth
FINDINGS AND R E C O M M E N D A T I O N
17
the r e q u e s t i n g a t t o r n e y o f Circuit must add risk, as Crcnl:ford establishes; specifically, the risk to 7989, at *9. having taken the specific case under review. Crc/ll1ord, 2009 WL 361 general guidance, the court turns to the specific fee request hcre.
12
With this
A.
T h e F e e Agreement. g r c e m e n t and The first step in the Gisbrecht analysis is to look to the contingency a
ary. A c o n t i n g e n t - f e e d e t e r m i n e w h e t h e r i t is w i t h i n t h e t w e n t y - f i v e p e r c e n t statutory bound greed the attorney fee for agreement exists between Dunnigan and his attorney, by which they a o f any past-due benefits work in federal court would be the greater of: (1) twenty-five percent the contingency-fee received, o r (2) any E A J A attorney fee award obtained. The terms o f agreement are within the statutory limits. b ) ' s twenty-five The next step is to confirm that the fee sought does not exceed § 4 0 6 ( ue benefits to be paid. percent ceiling, w h i c h d e t e r m i n a t i o n requires evidence o f t o t a l p a s t - d ast due-benefits to be Here, D u n n i g a n ' s attorney did not provide definitive evidence o f the p fee amount sought is awarded. However, he has represented in his supporting b r i e f that the twenty-five percent o f the past-due benefits to which Dunnigan is ent itled as o f the time o f filing
nty-five percent o f the pastthe attorney fee motion. I f the fee sought, $23,748.00, represents twe its would amount to due b e n e f i t s t o b e a w a r d e d t o D u n n i g a n , t h e n t h e total p a s t - d u e b e n e f s u p p o r t e d by $ 9 4 , 9 9 2 . 0 0 . A l t h o u g h e v i d e n c e o f the p r e c i s e a m o u n t or a n e s t i m a t e the record o f
f the a t t o r n e y ' s § 406(b) t h e p a s t - d u e b e n e f i t is t h e b e t t e r m e t h o d o f e s t a b l i s h i n g t h i s e l e m e n t o
case: ' ' ' R a t h c r . . T h e c o u r t e m p h a s i z e d f o c u s i n g the § 4 0 6 ( b ) a n a l y s i s o n the p a r t i c u l a r ngency agreement in the . a c o u r t ' s primary focus s h o u l d b e o n t h e reasonableness o f t h e c o n t i n. 7 (quoting Wells v. context o f the particular case.'" Crc/ll1ord, 2009 WL 3617989, at *5 Sullivan, 907 F.2d 367, 371 (2d Cir. 1990)).
12
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18
burden, the record in this case supports accepting D u n n i g a n ' s attorney's representation as adequate for conducting its reasonableness assessment. B. The Reasonableness o f the Fee Sought. I-laving determined that the contingent-fee percentage specified in agreement is within the statutorily mandated ceiling and that the fee sought does not excced that ceiling, the court turns to its primary inquiry, the rcasonableness o f t h c fee sought. D u n n i g a n ' s attorney seeks $23,748.00 for his work in this case before this court. Applying the Gisbreeht factors, as intcrpreted by Crclllford, the court finds that Dunnigan's attorney has not dcmonstrated that a twenty-five percent fee is reasonable o n the record o f this case. 1. The requesting attorney's burden.
Gisbreeht established that the attorney sceking a § 406(b) fce must demonstratc the reasonableness o f the fee sought, but the briefing Dunnigan's attorney filed in support o f his fee request does not specifically address each o f the Gisbreeht factors for determining reasonableness. The briefing does not address CrcllIford's effect o n the application o f the Gisbreeht factors. D u n n i g a n ' s attorney's only treatment o f Cral1ford was to file a "Notice" with the court on November 4, 2009, conveying without comment a copy o f t h c en bane opinion. The briefing that D u n n i g a n ' s attorney did offcr to support his fec requcst provides only limited assistance to the c o u r t ' s rcasonableness analysis. First, it primarily focuses on a lodestar approach by constructing a proposed reasonable hourly rate and then advocating for an enhancement o f that rate. Although Gisbreeht states and CrcllIford reinforces that the court may consider a lodestar calculation as an aid to its reasonableness assessment, Dunnigan's attorncy premises his fee request o n a lodcstar analysis. Thcse contravcnes Gisbreeht 's and Crau:ford's
FINDINGS AND RECOMMENDATION
19
directives to begin with the fee agreement and then test it for reasonableness by applying the
Gisbrecht factors to the specific case, ultimately deciding whether a downward adjustment is
appropriate. Second, the risk analysis focuses on the wrong risk factor. Crall:(ord directed that the risk factor to be considered is that o f taking "the specific case at issue" and not o f "the firm's overall success rate" in Social Security cases, and noted that an approach that turns on the firm's overall success rate instead o f the specific facts o f the case "miseonstru[es] the nature o f the risk assessment." D u n n i g a n ' s attorney's analysis takes the very approach to risk analysis that
C r a l l j o r d rejected.
Third, the risk analysis formula offered to support the requested hourly rate enhancement is indecipherable a n d n o t supported by the cited authority, or other authority. Dunnigan's attorney cites to the Oregon State Bar 2007 Economic Survey ("Survey") in support o f his calculations that Portland attorneys spend fifteen percent o f their time on, and derive seventeen percent o f their income from, contingency matters. (Amended P I ' s Memo. in Support 2-3.) However, the Survey does not address eontingency cases at all. He also attributes to the
G i s b r e c h t o p i n i o n s t a t i s t i c a l d a t a that o n l y " a 3 6 % c h a n c e o f w i n n i n g b e n e f i t s " e x i s t s for a S o c i a l
Security claimant. (Amended P I ' s Memo. in Support 3 & n.3.) However, no such data appears in the Gisbrecht opinion. In sum, the supporting briefing only partially informs the c o u r t ' s application o f the
Gisbrecht factors to the fee request in this case. These shortfalls do not preclude a
reasonableness analysis, however. The briefing submitted to support the fee request, together with the record o f the case, contains sufficient information relevant to the G i s b r e c h t factors to
f I N D I N G S AND RECOMMENDATION
20
enable the court to perform its role here. 2. T h e c h a r a c t e r o f the r e p r e s e n t a t i o n .
Gisbrecht stated that reduction o f a twenty-five percent contingency fee is appropriate i f the character o f the representation is substandard. Gisbrecht, 535 U.S. at 808. On this point the Supreme Court cited L e w i s v. Secretary o fHealth a n d Iluman Servs., 707 F.2d 246 (6th Cir. 1983), where, because o f the poor quality o f legal representation, the Sixth Circuit vacated and remanded a lower c o u r t ' s twenty-five percent attorncy fee award. Id. a t 2 5 0 - 5 1 . In Lewis, the substandard representation consisted o f c o u n s e ! ' s poor preparation for hearings, his failure to meet briefing deadlines, his submission o f court documents void o f l e g a l citations, and overbilling his client. Id. a t 248-50. The court also stated that "[ r]outine approval o f the statutory maximum allowable fee should be avoided in all cases. In a great majority o f the cases, perhaps, a reasonable fee will be m u c h less than the statutory maximum." Id. at 250. Dunnigan's attorney's representation was not substandard. Rather, it demonstrated c o m p c t e n c y i n and f a m i l i a r i t y w i t h t h e s u b j e c t m a l t e r , c o n s i s t e n t w i t h c o u n s c l ' s r e p r e s e n t a t i o n o f years o f experience representing Social Security claimants and his expertise in this area o f law. His briefing on the merits was useful to the court, was o f good quality, and focuscd on the issue key to Dunnigan's claim for benefits, whether or not D u n n i g a n ' s condition satisfied the criteria o f a listing. C o u n s c l ' s references to the administrative record were accurate, relevant, and helpful, and he cited to appropriate legal authority to support his arguments. Because, under Gisbrecht, reduction may be taken only for substandard performance, no reduction here is warranted under this factor.
FINDINGS AND RECOMMENDATION
21
3.
The results the representative achievcd.
mand for an award Dunnigan's attorney w o n benefits for his client. This court ordered re is court rejected the o f benefits, the remedy D u n n i g a n ' s attorney sought. h1 so ordering, th n g s instead. Commissioner's argument that remand should be for further proceedi r, are important to The circumstances o f the case in which the result is achieved, howeve c o u n s e l ' s efforts m a d e a the c o u r t ' s assessment o f t h i s factor. The inquiry focuses o n whether " m e a n i n g f u l a n d m a t e r i a l c o n t r i b u t i o n t o w a r d s the r e s u l t a c h i e v c d . " L i n d v. As/rue, No. SAC V
i s s i o n e r agreed w i t h 03-01499 AN, 2009 WL 499070, at *4 (C.D. Cal. 2009). The Comm be remanded. Thus, Dunnigan that the ALJ had e n e d and also agreed that the case should l d h a v e i f the D u n n i g a n ' s attorney faced a less daunting challenge here. than he wou to uphold the A L J ' s C o m m i s s i o n e r h a d v i g o r o u s l y d e f e n d e d the A L I ' s d e c i s i o n or a r g u e d g standard o f review. decision because the enol'S could not b e reversed under the controllin sue, w h e t h e r o r not In addition, the scope o f the parties' dispute w a s limited to a single is , the a d m i n i s t r a t i v e r e c o r d D u n n i g a n ' s c o n d i t i o n m e t t h e r e q u i r e m e n t s o f a listing. O n t h a t p o i n t y the ALJ, that Dunnigan's c o n t a i n e d c l e a r a n d u n e q u i v o c a l m e d i c a l testimony, n o t d i s c r c d i t e d b d d e m o n s t r a t e d with equal d e p r e s s i v e d i s o r d e r m e t t h e c r i t e r i a o f Listing I2.04(C)(2). T h e recor valuating this testimony. clarity that the ALJ erred b y misapplying the five-step framework in e g s and Moreover, the Commissioner filed no objections to this c o u r t ' s Findin ward o f bcnefits should be R e c o m m e n d a t i o n t h a t D u n n i g a n ' s r e q u e s t t o remand the c a s e f o r a n a d a t i o n a n d o r d e r e d that granted. The District Judge thereafter adopted this COUlt'S recommen t required to defend this benefits be awarded to Dunnigan. Thus, DUUl1igan's attorney was no r c o n v i n c e the D i s t r i c t c o u r t ' s r e c o m m e n d a t i o n a g a i n s t o b j e c t i o n s from t h e C o m m i s s i o n e r o
FINDINGS AND RECOMMENDATION
22
Judge to uphold this c o u r t ' s ruling. While the result achieved here, a n order for a n award o f benefits, is very favorable for Dunnigan, that outcome cannot be viewed in isolation nor can it be presumed always to require a fee award o f the full twenty-five percent. I f obtaining benefits always supported awarding fees for the full twenty-five percent, it would make irrelevant the other Gisbrecht factors and render perfimctory the trial courts' assigned task o f "making reasonableness determinations in a wide variety o f contexts[.]" Gisbrecht, 535 U.S. at 808. Nothing in G i s b r e c h t - o r C r m l 1 0 r d supports such a conclusion; rather, as the Sixth Circuit observed, "[r]outine approval o f the statutory maximum allowable fee should be avoided in all cases. In a great majority o f the cases, perhaps, a reasonable fee will be m u c h less than the statutory m a x i m u m . " Lewis v. SecretwJ10f Health a n d Human Sen1s., 707 F.2d at 250. 13 T h e i n s t a n t c a s e f a l l s w i t h i n the L e w i s c o u r t ' s a d m o n i t i o n . T h e f a v o r a b l e r e s u l t Dunnigan's attorney obtained for his client supports his fee request but does not compel a full award o f twenty-five percent. The Commissioner cased D u n n i g a n ' s a tto r n e y ' s task by conceding the A L l ' s errors and agreeing to remand. On the merits o f the single issue advanced by Dmmigan's attorney, the administrative record well revealed the A L l ' s analytical error. The circumstances here support a reduction from the twenty-five percent maximum. 4. Attorney responsible for any delay.
I t is evident from the record that this factor does not warrant a reduction in the fee
Dmmigan's attorney seeks. The Supreme Court stated that a reduction o f a requested fee is
Gisbrecht cited Lewis with approval when explaining the bases for the factors used to determine the reasonableness o f a § 406(b) fee request. See Gisbrecht, 535 U.S. at 808.
13
FINDINGS A N D R E C O M M E N D A T I O N
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ately caused delay in thc appropriate under under § 406(b) i f the requesting attorney inappropri n o f benefits" while the proceedings, so that the attorney "will not profit from the accumulatio n, 865 F.2d 739, 746-47 case is pending. Gisbrecht, 535 U.S. at 808 (citing Rodriquez v. Bowe i o n s for e x t e n s i o n s , o n e o f (6th Cir. 1989)). Here, D u n n i g a n ' s attorney filed two unopposed mot s to file his response to the forty-five days to submit his opening b r i e f and another o f fourteen day ts that either request was Commissioner's motion to remand. No evidence in the record sugges gly, reduction under this intended, even in part, to delay the proceedings in this case. Accordin factor is not warranted. 5. case. Whether the benefits are large in comparison to the time spent on the
n h i s c l i e n t ' s court D u n n i g a n ' s attorney represented that h e spent a total o f 40.79 h o u r s o arded are large in case. The statting p o i n t for determining whether the benefits to b e aw c h a r a c t e r i z a t i o n o f the comparison to the time counsel spent o n Dunnigan's case is c o u n s e l ' s upporting briefing for the time he invests in the typical Social Security case h e handles. In his s instant motion, he states: rney to 40 hours per case is used as a rough estimate o f what it takes this atto e n hundreds present a social security case to the Court. The undersigned has writt hours and o f social security briefs and the hours spent usually are between thirty fifty five hours in total. There are exceptions. ("Supplemental S u p p l e m e n t a l M e m o r a n d u m i n S u p p o r t o f 4 0 6 ( b ) A t t o r n e y F e e s 2 n.2 f t i m e that is almost the Memorandum"). In this case, D u n n i g a n ' s attorney spent an amount o exact amount o f time h e spends on most o f his cases. s the time he invests T h a t the amount o f time D u n n i g a n ' s attorney spent on this case equal me spent to the benefits o n m o s t o f h i s c a s e s i s i n s t r u c t i v e f o r the c o u r t ' s c o m p a r i s o n o f t h e t i aluating this factor. 535 obtained. Gisbrecht approved lower c o u r t s ' use o f time records in ev FINDINGS AND RECOMMENDATION 24
u.s. at 808.
time on this Here, D u n n i g a n ' s attorney represented that he invested an amount o f
the highest fee permitted ease equal to the time he spends on m o s t o f his eases, but he requests th C i r c u i t ' s view that full under the statute. I t is reasonable to conclude, consistent with the Six e should not as a matter o f fee awards should be the exception, that an average expenditure o f tim , b u t i n s t e a d suggests a routine translate to an award o f the statutory maximum contingent fee more moderate attorney fee as the appropriate compensation. r n e y performed t h a t N e x t in the c o u r t ' s comparison is to review the tasks Dunnigan's atto not provide an itemized comprise the basis for the 40.79 hours spent. Dunnigan's attorney did ad simply represented in time record or even a summary o f his time spent o n the ease, but inste e. Thus, the fee request his supporting b r i e f that h e spent 40.79 hours on his client's court cas red Crcl\l1ord. There, the here is immediately dissimilar in significant ways from those conside materials to aid the courts' plaintiffs' attorneys each submitted an itemized fee petition and other time spent on the case. determination o f whether the benefits were large in comparison to the r c e n t o f the p a s t - d u e Here, by contrast, D m m i g a n ' s attorney requests the full twenty-five pe his burden o f demonstrating b e n e f i t s b u t s u b m i t s no i t e m i z e d s t a t e m e n t o r o t h e r e v i d e n c e t o m e e t that his request is reasonable. o f the time spent to T h e l a c k o f d e t a i l f o r the t i m e s p e n t p r e c l u d e s a t h o r o u g h c o m p a r i s o n into the work comprising t h e b e n e f i t s w o n f o r the c l i e n t , b u t the c a s e ' s d o c k e t p r o v i d e s i n s i g h t easonableness o f the hours c o u n s e l ' s effort and, thus, allows an adequate basis for assessing the r the complaint (a two-page spent. D u n n i g a n ' s attorney filed three main documents in this case: ts in federal court), his d o c u m e n t t h a t f o l l o w e d s t a n d a r d f o r m a t for S o c i a l S e c u r i t y c o m p l a i n issioner's motion to remand opening b r i e f (fifteen pages in length), a n d his response to the Comm
FINDINGS AND RECOMMENDATION
2S
i n s the 5 9 7 - p a g e (which response comprised three pages). In addition, the record conta ioner's four-page answer, administrative transcript (a length in the average range), the Commiss s ten-pa and the Commissioner's one-page remand motion accompanied by hi g e supporting
efing. T h e o p e n i n g b r i e f memo, all o f which D u n n i g a n ' s attorney read, as evidenced by his bri dard con counsel s u b m i t t e d o n t h e m e r i t s c o n t a i n s a s i g n i f i c a n t a m o u n t o f s t a n tcnt for a Social
r i a t e s t a n d a r d o f review, a Security p l a i n t i f f s brief: a short statement o f jurisdiction, the approp elevant regulation (here, d e s c r i p t i o n o f t h e s e q u e n t i a l f i v e - s t e p process, a n d a s u m m a r y o f l h e r D u n n i g a n ' s medical Listing 12.04). The opening b r i e f also includes case-specific content: e hearing testimony in two histOly is outlined by date in bullet-point style, counsel summarizes th t h a t D u n n i g a n ' s conditions pages and the AL.l's decision in a single paragraph, and the argument ning b r i e f - wove law and met the listing's criteria - by far, the single longest section o f the ope a s i m i l a r workman-like fact with workman-like skill. The three-page response demonstrated effOlt. e r e c o r d compels Review o f t h e s e filings as well as the transcript and other entries in th cal o r average, as counscl's the conclusion that this case was not remarkable and was instead typi orcing the assessment that r e p r e s e n t a t i o n o f t h e a m o u n t o f h o u r s s p e n t w o u l d suggest, t h u s r e i n f e hours spent are average nothing commends a fee outside the average range. Therefore, that th ction from the twenty-five and the work performed consistent with an average case supports redu percent maximum here. 6. The risk presented b y the case.
i n g a § 406(b) Cra1l1ord clarified that risk is an appropriate factor to consider in determin the focus o f the risk award. The opinion also made clear that the individual case must be
FINDINGS A N D R E C O M M E N D A T I O N
26
analysis: " t h e district court should look at the complexity and risk involved in the specific case at issue to determining h o w much risk the firms assuming in taking the case." Crcl1l{ord,2009 WL 3617989, at *9. Looking at a particular firm's "overall succcss rate" is the wrong approach to asscssing risk. ld. In his supporting briefing, D u n n i g a n ' s attorney quantifies risk using the approach that
C r G \ I { o r d e x p r e s s l y r e j e c t e d . H i s a n a l y s i s c e n t e r s o n the risk o f n o n - p a y m e n t a n d u n d e r p a y m e n t
in contingent cases generally ( P I ' s Supp. Memo. 2), and he devotes much o f his discussion to constructing the hourly fee needed in succcssful cases to compensatc him for thesc risks. D u n n i g a n ' s a t t o r n e y , h o w e v e r , d i d n o t d i s c u s s " t h e s p e c i f i c facts t h a t m a k e a g i v e n c a s e m o r e or less risky for the firm," CrG\I{ord, 2009 WL 3617989, at *9, or in any way tie his risk analysis to the p a r t i c u l a r s o f D u n n i g a n ' s c a s e . Turning then to the particular circumstanccs o f this case, the court concludes that neither the factual nor legal issues were particularly complex. The parties agreed that remand should be o r d e r e d b u t d i s p u t e d f o r w h a t p u r p o s e r e m a n d s h o u l d b e made. T h c i r d i s p u t e c e n t e r e d o n whether o r not D u n n i g a n ' s condition met a listing requirement at step three under Title II, and whether a condition meets a listing requirement is a common issue in Social Security cases. On that issue, Dr. Davis had testified at hearing that Dmmigan in fact met the rcquirement, and both partics ultimately agreed that the A U incol'I'ectly evaluated Dr. D a v i s ' s testimony. Dunnigan's m e d i c a l c o n d i t i o n s i n v o l v e d a n x i e t y and s u b s t a n c e a b u s e d i s o r d e r s t h a t , w h i l e s e r i o u s , a r c n o t medically complex ailments. 111e length o f t h e record supports this conclusion; for a Social Security case, it is o f average length. C o u n s e l ' s medical summary also supports this conclusion, as it comprised only two pages o f his opening bricf. (PI's Opening B r i e f 2 - 4 . ) And, Dunnigan's
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27
opening b r i e f totaled only fifteen pages and his reply j u s t three pages, underscoring the relative absence o f complex o r unusual factual and legal complexity in the case. In sum, the record o f this case discloses no basis to conclude that Dumligan's situation presented unique, unusual, complex, or extensive facts o r legal issues. Rather, at the conclusion o f the a d m i n i s t r a t i v e p r o c e s s , D u n n i g a n ' s c i r c u m s t a n c e s p r e s e n t e d a c a s e i n v o l v i n g c o m m o n l y encountered issues and a typical factual record that did not involve technical, complicated, o r obscure medical issues. Accordingly, the court concludes that this case presented a risk no greater than average to the attorney considering it for possible appeal to the district court. Thus, reduction from the twenty-five percent maximum is warranted under this factor. C. The Fee Award In This Case. Dunnigan's attorney seeks a fee o f $23,748.00, an amount he says represents twenty-five percent o f a past-due benefits award that his client will receive. Applying the Gisbrecht factors and guided by the N i n t h C i r c u i t ' s ClYl1I:{ord discussion o f those factors, the court has determined that reductions are appropriate under three o f the six factors it m u s t consider: the results achievcd, the benefits obtained compared to the time spent, and the risk presented by the case. Fully explained abovc, the c o u r t ' s reasons for reducing thc fee from the full twenty-five percent distill to the average nature o f the c a s e ' s facts and legal issues, coupled with a fee request supported by arguments and analysis that do not squarely address the Gisbrecht factors and which do not conform to CI'(/)l:{ol'd's directives. In this case, the c o u r t concludes that Dunnigan's attorney's § 406(b) fee request should be reduced to fifty percent o f the total requested. This percentage accounts for reduction under the factors discussed above and c o u n s e l ' s failure to support his fee request consistent with
FINDINGS A N D R E C O M M E N D A T I O N
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CraHford's directivcs, but also includes accounts for c o u n s e l ' s experience and expertise in this
area o f law, considerations that mitigate the reduction hcre. On that latter element, this court agrees with Judge B e a ' s observation that the courts should avoid fee awards that "punish successful attorneys and reward incompetent attorneys" (Crcl\lford, 2009 WL 3617989, at *14
n A ) (Bea, J., dissenting), a result obtained when courts award lower § 406(b) fees to experienced
attorneys who spend less time on a Social Security case because they are more experienced and efficient in handling thcm. The record here supports a fee award that takes into account D u n n i g a n ' s attorney's experience in this area, which undoubtably contributed to the result he obtained for his client. 14 Applying the reduction to the $23,748.00 requested fee results in a § 406(b) fee award o f $ l l , 8 7 4 . 0 0 .
CraHford expressly recognized that "[a]s evidence o f the reasonableness o f the resulting
fee," the court may consider as an aid counsel's billing records and lodestar calculations.
Cl'cl\lford, 2009 W L 3617989, at *7. A comparison o f the § 406(b) fee the court has determined
should b e awarded here to a lodestar assessment is a n appropriate method o f gauging the reasonableness o f that fee award. As an initial observation, it is D u n n i g a n ' s attorney's burden to demonstrate the reasonableness o f his fee request, but he did not specifically address the
Gisbrecht factors o r CraHfol'd's application o f them, did not provide detailed billing records, and
did not provide his regular hourly rate because he represented that he takes all his cases on a contingent-fee arrangement. Instead, he provided only the total number o f hours he spent on the
14 D u n n i g a n ' s attorney has practiced Social Security l a w for fourteen years, has coauthored the two most recent Oregon State Bar CLE publications on Social Security law, and is co-founder o f the Oregon Social Security Claimants Organization. (Amended P l . ' s Memo in Support 2 n . I . )
FINDINGS A N D R E C O M M E N D A T I O N
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case and supported the effective hourly rate, $582.20, that his proposed fee award would produce with a series o f calculations not based on this specific case and w h i c h lack supporting authority. These shortcomings impair c o u n s e l ' s effort to meet that burden, but there is enough information in the record, coupled w i t h c o u n s e l ' s supporting briefing, to aid the c o u r t ' s comparison on this point." The c o u r t ' s fee award here results in an effective hourly rate o f $291.1 0, a per-hour rate almost twenty percent highcr than thc $244.00 hourly rate for Portland private-practice attorneys in the "other" category, which rate D u n n i g a n ' s attorney offered as t h e base hourly ratc for his calculations. (Amended P I ' s M e m o in Support 2-3.) In fact, this effective hourly rate places Dunnigan's attorney comfortably above both the average and mcdian o f hourly billing rates o f Portland attorneys in thc " o t h e r " category, at approximately the 66th percentile, and wcll above both the average and median o f hourly billing rates o f Portland attorneys in private practice with comparable years o f expericnce, at approximately the 70th percentile. See Oregon State Bar
2 0 0 7 Economic Survey at 28, 31. Under a traditional lodestar approach, the effective hourly rate
rcsulting from the c o u r t ' s award here is squarely within thc rcasonable range. Furthermore, the amount o f the fcc rcpresents twelve and o n e - h a l f percent o f the past-due benefits to be awarded
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