Jerry A Curtis v Jo Anne B Barnhart, No. 8:2006cv00319 - Document 29 (C.D. Cal. 2008)
Court Description: ORDER GRANTING PLAINTIFFS PETITION FOR ATTORNEYS FEES PURSUANT TO 42 U.S.C. § 406(b)by Magistrate Judge Oswald Parada. Plaintiffs counsel should be paid the sum of $17,854.10 from the amount withheld by the Commissioner from Plaintiffs past-due benefits which takes into account the $5,675.65 already paid in EAJA fees (am)
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Jerry A Curtis 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 JERRY A. CURTIS, Plaintiff, 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 v. MICHAEL ASTRUE, Commission of the Social Security Administration, Defendant. ) ) ) ) ) ) ) ) ) ) ) ) NO. SACV 06-319-OP ORDER GRANTING PLAINTIFF’S PETITION FOR ATTORNEY’S FEES PURSUANT TO 42 U.S.C. § 406(b) I. INTRODUCTION After a denial of an application for disability benefits under Title II of the Social Security Act, Plaintiff sought review in this Court of Defendant’s decision denying her benefits. After the parties filed the Joint Stipulation, the Court found for Plaintiff and ordered remand for payment of benefits. Pursuant to the parties’ stipulation, this Court ordered payment fo EAJA fees in the amount of $5,675.65. On remand, the Commissioner issued a Notice of Award, dated April 12, 2008, informing Plaintiff that he would received Title II benefits, effective September 2002. Plaintiff has now filed a Petition for Attorney’s Fees pursuant to 42 U.S.C. § 406(b) (“Petition”). Defendant Dockets.Justia.com 1 submitted a Response to the Petition (“Response”).1 For the reasons discussed below, 2 the Petition is GRANTED. 3 II. 4 PROCEDURAL HISTORY The Law Offices of Binder and Binder, PC, represented Jerry A. Curtis before the 5 6 United States District Court on the basis of a retainer agreement to cover those services 7 calling for fees of 25% of the back benefits. After the parties filed the Joint Stipulation, 8 the Court found for Plaintiff and ordered remand for payment of benefits. Pursuant to 9 the parties’ stipulation, this Court ordered payment fo EAJA fees in the amount of 10 $5,675.65. On remand, the Commissioner issued a Notice of Award, dated April 12, 11 2008, informing Plaintiff that he would received Title II benefits, effective September 12 2002. The Social Security Administration has effectuated the decision, paid benefits and 13 withheld $23,529.75 for attorneys fees. The Petition seeks $17,854.10 in fees which 14 takes into account the $5,675.65 already paid in EAJA fees. (Pet. at 3). 15 III. 16 DISCUSSION 17 A. Fees Awarded To Attorneys Who Successfully Represent Social Security 18 Benefit Claimants In Court. 19 An attorney who successfully represents a Social Security benefits claimant in 20 court may be awarded as part of the judgment “a reasonable fee . . . not in excess of 25 21 percent of the total of the past-due benefits” awarded to the clamant.2 42 U.S.C. § 22 23 1 24 25 26 27 28 Because the Commissioner is not a party to the contingency fee agreement between Plaintiff and his attorney, he simply “offers below an analysis of the fees sought in the event that it may assist the court in the Court’s determination.” (Response at 2.) 2 For representation of a benefits claimant at the administrative level, an attorney may file a fee petition or fee agreement. 42 U.S.C. § 406(a). In the event of a determination favorable to the claimant, the Commissioner “shall . . . fix . . . a reasonable fee” for the 2 1 406(b)(1)(A). The fee is payable “out of, and not in addition to, the amount of [the] 2 past-due benefits.” Id. Because benefits amounts figuring in the fee calculation are 3 limited to those past due, attorneys may not obtain additional fees based on a claimant’s 4 continuing entitlement to benefits. Fee awards may be made under the Equal Access to Justice Act (“EAJA”), as 5 6 well as 42 U.S.C. § 406(b) (“Section 406(b)”). As was the case here, Plaintiff was 7 previously awarded EAJA fees in the amount of $5,675.65 for services rendered by 8 counsel in securing the remand of his case. An EAJA award, however, offsets an award 9 under Section 406(b) so that the total past-due benefits actually received by the claimant 10 is increased by the amount of the EAJA award up to the point where the claimant could 11 potentially obtain one hundred percent of past-due benefits. Gisbrecht v. Barnhart, 535 12 U.S. 789, 796, 122 S. Ct. 1817, 152 L. Ed. 2d 996 (2002) (citation omitted). 13 B. 14 The Applicable Case Law. In Gisbrecht, the Supreme Court resolved a circuit split in the appropriate method 15 of calculating fees under Section 406(b). Several circuits, including the Ninth Circuit, 16 had followed the “lodestar” method, under which the number of hours reasonably 17 devoted to each case was multiplied by a reasonable hourly rate. Gisbrecht, 535 U.S. at 18 799 (citations omitted). Other circuits had given effect to an attorney-client contingent- 19 fee agreement if the resulting fee were reasonable. Id. (citations omitted). 20 The Court evaluated the two approaches and concluded that Section 406(b) 21 (limiting attorney’s fees to twenty-five percent of past-due benefits) was designed to 22 control, and not displace, contingent fee agreements that are within the statutory ceiling. 23 Id. at 807-09. The Court held that Section 406(b) “calls for court review of such 24 25 26 27 28 attorney’s services. Id. § 406(a)(1). As an alternative to fee petitions, an attorney may file a contingency fee agreement with the Agency in advance of a ruling on the claim for benefits. Id. §§ 406(a)(2)-(4). If the ruling is favorable to the claimant, the Agency will generally approve the agreement subject to certain limitations. Id. §§ 406(a)(2)(A)(ii) and (iii). 3 1 arrangements as an independent check, to assure that they yield reasonable results in 2 particular cases.” Id. at 807; see also Hearn v. Barnhart, 262 F. Supp. 2d 1033, 1036 3 (N.D. Cal. 2003) (citing Gisbrecht). In rejecting the lodestar approach, the Court noted 4 that, while the lodestar method was used in federal-court adjudication of disputes over 5 the amount of fees properly shifted to the loser in litigation, fee-shifting to a losing party 6 was not relevant in Section 406(b) cases. Gisbrecht, 535 U.S. at 802. As the Court 7 observed, Section 406(b) does not authorize the prevailing party to recover fees from the 8 losing party; rather, it authorizes fees payable from the successful party’s recovery. Id. In testing the reasonableness of fees yielded by contingency fee agreements within 9 10 Section 406(b)’s twenty-five percent ceiling, courts have examined the character of the 11 representation and the results achieved. Id. at 808. For example, if an attorney is 12 responsible for any delay, his contractual recovery may be reduced to prevent the 13 attorney from profiting from the accumulation of benefits during the pendency of the 14 case in court. Id. (citation omitted). Additionally, if the benefits are large in comparison 15 to the amount of time counsel spent on the case, a downward adjustment might be 16 appropriate. Id. (citations omitted). 17 C. The Reasonableness Of The Fees Yielded By The Instant Contingency Fee 18 Agreement. 19 In this case, the sole issue is the reasonableness of the fees yielded by the 20 contingency fee agreement between Plaintiff and his counsel. While Plaintiff’s counsel 21 acknowledges the EAJA offset, the amount of fees subject to the court’s analysis 22 remains the aggregate derived from the agreement: twenty-five percent of the past-due 23 benefits, according to Plaintiff’s counsel. The Petition includes a declaration of counsel 24 and documentation supporting counsel’s fee request. 25 The Court is satisfied that the fee sought under the contingency agreement is 26 reasonable. As with any contingency fee agreement, the risk of loss in this case was 27 substantial. Furthermore, the Court notes that before Plaintiff succeeded in obtaining 28 4 1 benefits, he exhausted the multi-tiered administrative appeals process. 2 The character of the representation in this case was not substandard and attests to 3 the reasonableness of the fee. Plaintiff’s counsel was successful in obtaining an order 4 for immediate payment of benefits, rather than for remand for further proceedings. The 5 results of the representation, therefore, support the reasonableness of the fee. As one 6 court recently observed in a Section 406(b) case: 7 Attorneys who take cases on contingency, thus deferring payment of their 8 fees until the case has ended and taking upon themselves the risk that they 9 will receive no payment at all, generally receive far more in winning cases 10 than they would if they charged an hourly rate. The difference, however, 11 reflects the time value of money and the risk of non-recovery usually borne 12 by clients in cases where lawyers are paid an hourly rate. 13 Coppett v. Barnhart, 242 F. Supp. 2d 1380, 1384 n.7 (S.D. Ga. 2002) (citing Hensley v. 14 Eckerhart, 461 U.S. 424, 448-49, 103 S. Ct. 1933, 76 L. Ed. 2d 40 (1983) (Burger, J., 15 concurring)). Significantly, since Gisbrecht, district courts have been deferential to the 16 terms of contingency contracts in Section 406(b) cases, accepting that the resulting de 17 facto hourly rates may exceed those for non-contingency fee arrangements. Hearn, 262 18 F. Supp. 2d at 1037 (awarding $25,132.50 in Section 406(b) fees, equivalent to $450.00 19 per hour) (citing, inter alia, Martin v. Barnhart, 225 F. Supp. 2d 704 (W.D. Va. 2002) 20 (awarding $10,189.50, equivalent to $605.00 per hour); Coppett, 242 F. Supp. 2d 1380 21 (awarding $6,554.12, equivalent to $350.49 per hour). 22 /// 23 /// 24 /// 25 /// 26 /// 27 In conclusion, the Court finds that the fee requested by Plaintiff, which does not 28 5 1 exceed the twenty-five percent statutory ceiling of Section 406(b), is reasonable under 2 the inquiry called for by Gisbrecht. Plaintiff’s counsel should be paid the sum of 3 $17,854.10 from the amount withheld by the Commissioner from Plaintiff’s past-due 4 benefits which takes into account the $5,675.65 already paid in EAJA fees 5 6 IT IS SO ORDERED. 7 8 9 DATED: September 5, 2008 HONORABLE OSWALD PARADA United States Magistrate Judge 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 6
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