Michelle Lynn Drake v. Carolyn W Colvin, No. 5:2013cv01446 - Document 27 (C.D. Cal. 2018)
Court Description: ORDER DENYING WITHOUT PREJUDICE MOTION FOR ATTORNEY FEES PURSUANT TO 42 U.S.C. § 406(b) by Magistrate Judge Autumn D. Spaeth: IT IS HEREBY ORDERED that Counsel's Motion for Attorney Fees Pursuant to 42 U.S. C. § 406(b) 21 is DENIED without prejudice. (kh)
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Michelle Lynn Drake v. Carolyn W Colvin Doc. 27 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 12 Plaintiff, 13 v. 14 Case No.: 5:13-cv-0 1446 ADS MICHELLE DRAKE, an Individual, ORDER DENYING WITHOUT PREJ UDICE MOTION FOR ATTORNEY FEES PURSUANT TO 42 U.S.C. § 40 6(b) NANCY A. BERRYHILL, Acting Com m issioner of Social Security, 15 Defendant. 16 17 18 19 20 21 22 23 24 I. IN TROD U CTION Plaintiff Michelle Drake’s (“Plaintiff”) counsel, Bill LaTour of the Law Offices of Bill LaTour (“Counsel”), filed a Motion for Attorney Fees Pursuant to 42 U.S.C. § 40 6(b) (“Motion”). The Motion seeks an award of $ 19,155.50 for representing Plaintiff in an action to obtain Social Security disability benefits, with a credit to Plaintiff for the fees previously awarded under the Equal Access to J ustice Act (“EAJ A”) of $ 2,0 0 0 , for a net fee of $ 17,155.50 . The parties have consented to the jurisdiction of the undersigned 25 26 -1Dockets.Justia.com 1 United States Magistrate J udge, pursuant to 28 U.S.C. § 636(c). For the reasons stated 2 below, the Court denies the Motion without prejudice. 3 II. RELEVAN T BACKGROU N D According to the Motion, on April 8, 20 0 9, Plaintiff retained Counsel to represent 4 5 her with her Title II Social Security Disability claim . Motion, Exhibits 1a and 1b.1 On 6 April 8, 20 11, Plaintiff and Counsel entered into a “Fee Agreem ent – Federal Court”, 7 wherein it was agreed that Counsel would receive 25 percent of the past-due benefits 8 that are awarded. Motion, Exhibit 6. An appeal of the denial of Plaintiff’s benefits was 9 filed, a hearing was held before an Adm inistrative Law J udge (“ALJ ”), and an 10 unfavorable decision by the ALJ was issued on May 10 , 20 12. Motion, Exhibit 2. After a 11 request for review was denied, on behalf of Plaintiff, Counsel filed a Com plaint in 12 Federal Court on or about August 27, 20 13, alleging the Com m issioner of the Social 13 Security Adm inistration (“Defendant”) im properly denied Plaintiff benefits. [Docket 14 (“Dkt.”) No. 3]. On April 28, 20 14, the Court entered a J udgm ent rem anding the m atter 15 for further adm inistrative proceedings pursuant to Sentence Four of 42 U.S.C. § 40 5(g). 16 [Dkt. 18]. Also on J une 25, 20 14, the Court issued an order awarding EAJ A fees of 17 $ 2,0 0 0 , as stipulated to by the parties. [Dkt. 20 ]. 18 On rem and, the ALJ held a new hearing and on October 17, 20 16, issued a 19 “Notice of Decision – Fully Favorable”, finding Plaintiff disabled as of her alleged onset 20 date of October 15, 20 0 9 and awarding back benefits due of $ 92,622. Motion, Exhibits 21 9 and 10 . Plaintiff and Counsel were notified of the am ount of the award, Medicare 22 23 24 25 26 1 The Court references the exhibits Counsel attaches to the Motion, but does not rely on them as evidence. As set forth below, Coun sel has failed to provide any authentication of the exhibits as required by the Federal Rules of Evidence. -2- 1 benefits, and withholding of attorney fees by letter from the Social Security 2 Adm inistration, dated Decem ber 24, 20 16. Motion, Exhibit 10 . The copy of this letter 3 subm itted by Counsel includes a “Law Offices of Dr. Bill LaTour Received” date stam p of 4 J anuary 5, 20 17. Motion, Exhibit 10 . 5 More than a year and a half later, on J une 15, 20 18, Counsel filed this Motion, 6 with purported notice given to Plaintiff. [Dkt. 21]. Plaintiff did not file an opposition or 7 any response. On J une 29, 20 18, Defendant filed a Response to the Motion taking no 8 official position on the reasonableness of the fee request, but pointing out the unusually 9 high hourly rate that would result if the Motion were to be granted as requested. With 10 the parties’ consent, the case was reassigned to Magistrate J udge Autum n D. Spaeth for 11 all further proceedings on August 10 , 20 18. [Dkt. No. 26]. 12 III. D ISCU SSION 13 A. 14 Attorneys who successfully represent Social Security claim ants m ay petition for Ap p licable Law 15 fee awards under 42 U.S.C. sections 40 6(a) and (b), and/ or under the EAJ A as 16 applicable. Pursuant to 42 U.S.C. § 40 6(b) (Section 40 6(b)): 20 Whenever a court renders a judgm ent favorable to a claim ant under this subchapter who was represented before the court by an attorney, the court m ay determ ine and allow as part of its judgm ent a reasonable fee for such representation, not in excess of 25 percent of the total of the past-due benefits to which the claim ant is entitled by reason of such judgm ent, and the Com m issioner of Social Security m ay . . . certify the am ount of such fee for paym ent to such attorney out of, and not in addition to, the am ount of such past-due benefits. 21 42 U.S.C. § 40 6(b)(1)(A). Thus, “a prevailing [disability] claim ant’s [attorney’s] fees are 22 payable only out of the benefits recovered; in am ount, such fees m ay not exceed 25 23 percent of past-due benefits.” Gisbrecht v. Barnhart, 535 U.S. 789, 792 (20 0 2). 17 18 19 24 25 26 Where a claim ant entered into a contingent fee agreement with counsel, a court m ust apply Section 40 6(b) “to control, not to displace, fee agreements between Social -3- 1 Security benefits claim ants and their counsel.” Id. at 793. Aside from capping the 2 contingency rate at 25 percent, Section 40 6(b) does not explain how courts should 3 determ ine if requested attorney fees are reasonable. Crawford v. Astrue, 586 F.3d 1142, 4 1148 (9th Cir. 20 0 9) (en banc). In Gisbrecht, the Suprem e Court held that where the 5 claim ant and counsel had entered into a lawful contingent fee agreem ent, courts that 6 used the “lodestar” m ethod as the starting point to determ ine the reasonableness of fees 7 requested under Section 40 6(b) im properly “reject[ed] the prim acy of lawful attorney- 8 client fee agreem ents.” Gisbrecht, 553 U.S. at 793. As the Ninth Circuit explained in 9 Crawford, lodestar rules should not be applied by courts in cases where the plaintiff and 10 11 12 13 14 15 attorney reached a contingent fee agreem ent because: [t]he lodestar m ethod under-com pensates attorneys for the risk they assum e in representing [social security] claim ants and ordinarily produce rem arkably sm aller fees than would be produced by starting with the contingent-fee agreement. A district court’s use of the lodestar to determ ine a reasonable fee thus ultim ately works to the disadvantage of [social security] claim ants who need counsel to recover any past-due benefits at all. Crawford, 586 F.3d at 1149. However, even in contingency fee cases, a court has “an affirm ative duty to assure 16 that the reasonableness of the fee [asserted by counsel] is established.” Id. The court 17 m ust exam ine “whether the am ount need be reduced, not whether the lodestar am ount 18 should be enhanced.” Id. A fee resulting from a contingent-fee agreem ent is 19 unreasonable, and thus subject to reduction by the court, if the attorney provided 20 substandard representation or engaged in dilatory conduct in order to increase the 21 accrued amount of past-due benefits, or if the “benefits are large in com parison to the 22 am ount of tim e counsel spent on the case.” Id. at 1148 (citing Gisbrecht, 535 U.S. at 23 80 8). “[A]s an aid to the court’s assessm ent of the reasonableness of the fee yielded by 24 the fee agreem ent,” but “not as a basis for satellite litigation,” the court m ay require 25 26 -4- 1 counsel to provide a record of the hours worked and counsel’s regular hourly billing 2 charge for noncontingent cases. Id. The attorney bears the burden of establishing that 3 the fee sought is reasonable. Id. 4 B. An alys is 5 Here, Counsel seeks fees of $ 19,155.50 , with an order to reim burse Plaintiff the 6 am ount of $ 2,0 0 0 for EAJ A fees paid, resulting in a net attorney fee of $ 17,155.50 .2 7 According to the Motion, Plaintiff was awarded $ 92,622 in back benefits. Thus, Counsel 8 seeks 18.5 percent of Plaintiff’s back benefits. Counsel states that he expended 8.2 hours 9 of attorney tim e and 3.5 hours in paralegal tim e in the representation of Plaintiff before 10 this Court.3 Motion, Exhibit 8a. The requested attorney fee award, based upon the 11 “com bined” attorney and paralegal tim e expended in representing Plaintiff in District 12 Court, results in an hourly rate of $ 1,466.20 . 13 The Court m ust deny this Motion for a num ber of reasons, though it does so 14 without prejudice. First, Counsel subm its no adm issible evidence in support of the 15 2 16 17 18 19 20 21 22 23 24 According to the Motion, Counsel was previously awarded $ 4,0 0 0 in adm inistrative fees for representation before the Social Security Adm inistration pursuant to 42 U.S.C. § 40 6(a). Fees awarded under Section 40 6(a) are not to be calculated into the 25 percent allowable contingent fees under Section 40 6(b). See Clark v. Astrue, 529 F.3d 1211, 1215-16 (9th Cir. 20 0 8) (holding that 25 percent cap on fees under Section 40 6(b) is not a cap for total fees under Sections 40 6(a) and (b)); accord Labor v. Colvin, 631 Fed.Appx. 468, 468-69 (9th Cir. 20 16). 3 The Motion also m akes reference to five additional paralegal hours that were spent in the preparation of the Motion itself. It is som ewhat vague whether or not Counsel also seeks recovery of fees for these hours. There is no basis, statutory or contractual, however, for charging Plaintiff for the tim e spent by her attorney in litigating the attorney’s claim to fees under Section 20 6(b). See Coup v. Heckler, 834 F.2d 313, 325 (3rd Cir. 1987), abrogated on other grounds by Gisbrecht, 535 U.S. 789; Craig v. Secretary, Dept. of Health and Hum an Services, 864 F.2d 324, (4th Cir. 1989), abrogated on other grounds by Gisbrecht, 535 U.S. 789. Accordingly, the Court considers only the com bined 11.7 hours spent litigating Plaintiff’s claim in Federal Court in determ ining whether the requested fee is reasonable. 25 26 -5- 1 Motion as required. See Fed. R. Civ. P. 56(c)(4); Central District of California Local 2 Civil Rules (“Local Rules”) 7-5 and 7-6. Counsel fails to subm it a declaration with the 3 Motion, with a breakdown or description of hours expended by him and his office or of 4 the regular hourly rates charged in noncontingent cases. Indeed, the Motion lacks a 5 statem ent under oath by som eone with personal knowledge of the tim e actually 6 expended on behalf of the Plaintiff, or of the authenticity and veracity of any of the 7 exhibits attached to the Motion. A declaration m ade under penalty of perjury, and 8 otherwise in com pliance with the requirem ents of 28 U.S.C. § 1746, setting forth a 9 breakdown of hours expended with regular hourly rates and authenticating and 10 attaching any docum ents subm itted as evidence, should have been subm itted. See Fed. 11 R. Civ. P. 56(c)(4); Central District of California Local Civil Rules 7-5 and 7-6. Based on 12 the lack of any adm issible evidence subm itted with the Motion, Counsel has not m et his 13 burden of “establishing” that the fee sought is reasonable. See Crawford, 586 F.3d at 14 1148. 15 Second, even if the exhibits to the Motion were properly presented as adm issible 16 evidence, the Court has a particular concern given the am biguous language contained in 17 the fee agreem ent subm itted as Exhibit 6. The applicable fee agreem ent states, Plaintiff 18 understands “that the total fee could am ount to several thousand dollars or several 19 hundred dollars per hour on an hourly basis.” See Exhibit 6. The Motion seeks fees far 20 in excess of “several thousand dollars” an d the requested com bined attorney/ paralegal 21 hourly fee of $ 1466.20 is well above “several hundred dollars per hour.” Because the 22 agreem ent is am biguous, there is no evidence in this record that the Plaintiff understood 23 that her attorneys’ fees could be this high. Indeed, there is no evidence that the Plaintiff 24 still resides at the address to which Counsel served the Motion, particularly given the 25 significant delay in the filing of the Motion as discussed below. Thus, as there is no 26 -6- 1 adm issible evidence in the record, the Court does not feel com fortable that Counsel has 2 established his client’s consent as a fact to be considered by the Court. 3 The Court is also concerned about the significant delay in filing the Motion. 4 According to the docum ents attached to the Motion, Counsel received the Social 5 Security Adm inistration’s Decem ber 24, 20 16 letter notifying him of Plaintiff’s back 6 benefits and the withholding of attorney fees by no later than J anuary 5, 20 17. Counsel 7 did not file the Motion until J une 15, 20 18, a year and a half later. As such, this Court is 8 concerned about the tim eliness of the Motion. If Counsel chooses to file a renewed 9 m otion, Counsel m ust address the issue of whether the m otion is tim ely. The Ninth 10 Circuit has not yet considered the issue of when a m otion for Section 40 6(b) fees m ust 11 be filed in order to be tim ely, and there is a split am ong other circuits as to whether 12 there is a fourteen day filing deadline under Fed. R. Civ. P. 54(d)(2), or whether the 13 “reasonable tim e” standard of Fed. R. Civ. P. 60 (b)(6) applies. Com pare Walker v. 14 Astrue, 593 F.3d 274, 280 (3rd Cir. 20 10 ) (holding Fed. R. Civ. P. 54(d)(2) is the 15 appropriate avenue through which counsel can seek attorney fees following a Section 16 40 6(b) adm inistrative rem and and that the fourteen day filing deadline begins to accrue 17 upon counsel being notified of an award issued by the Com m ission); Pierce v. Barnhart, 18 440 F.3d 657, 663-64 (5 th Cir. 20 0 6); Bergen v. Com m issioner of Social Sec., 454 F.3d 19 1273, 1277 (11th Cir. 20 0 6); with McGraw v. Barnhart, 450 F.3d 493, 50 5 (10 th Cir. 20 0 6) 20 (holding that the “reasonable tim e” standard of Fed. R. Civ. P. 60 (b)(6), which allows a 21 court to relieve a party or its legal representative from a final judgm ent, order or 22 proceeding for any reason that justifies relief applies to Section 40 6(b) m otions). Under 23 application of either standard, at present and on this record, for the reasons stated 24 above, the Court views Counsel’s Motion as untim ely. 25 26 -7- 1 2 3 IV. ORD ER Based on the foregoing, IT IS HEREBY ORDERED that Counsel’s Motion for Attorney Fees Pursuant to 42 U.S. C. § 40 6(b) is DENIED without prejudice. 4 5 IT IS SO ORDERED. 6 7 8 9 DATE: Septem ber 11, 20 18 /s/ Autumn D. Spaeth THE HONORABLE AUTUMN D. SPAETH United States Magistrate J udge 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 -8-
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